25th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I direct my question to the Leader of the Government in the Senate. In view of the Government’s inability to secure volunteers to go to the unwinnable war in Vietnam, will the Prime Minister give consideration to calling on all Government members, supporters and candidates of military age, including the Liberal Party candidate in the Kooyong byelection, and the eligible sons of all those parliamentarians who support conscription, to volunteer to take the places of an equivalent number of 20 year old voteless conscripts?
– 1 really think that that question is not worthy of an answer.
– ls the Acting Minister for External Affairs aware that, at a so-called spontaneous demonstration against Australia’s commitment in Vietnam in Perth on Saturday, pamphlets authorised by a J. Broomhall of 75 Bulwer Street, Perth, were distributed? Is he also aware that 75 Bulwer Street, Perth, is given on page 83 of the Western Australian telephone directory as the Communist Party headquarters?
– I have seen Press reports that on Saturday 70 to 100 people marched through Perth, objecting to compulsory military service and Australia’s resistance of aggression in Vietnam. Some of the people who were present received pamphlets, one of which I have seen. It is authorised by a J. Broomhall of 75 Bulwer Street, Perth, and 75 Bulwer Street, Perth, is the headquarters of the Communist Party in Western Australia.
– Has the Minister representing the Minister for Labour and National Service seen a statement in today’s “Sydney Morning Herald” that a meeting of the organisation that calls itself Youth Against Conscription, which meeting was held to arrange legal aid for draft card burners, took place at the Sydney head- quarters of the Communist sponsored Australian Congress for Peace and Disarmament? Is this further evidence of the Communist inspiration of these mushroom organisations? Is the Communist Party’s campaign against national service further evidence that it is serving the policies of international Communism and not of the security of Australia? Is it a fact that in 1943 the Communist Party advocated the conscription of the entire Australian manhood to save the Soviet Union and that its present attitude to conscription is again determined by its masters overseas?
– I did not see the Press report to which the honorable senator has referred. But what he has said is in line with the other facts that we know, such as that the Save Our Sons Movement has the same post office box number as the Congress for Peace and Disarmament, which has been declared to be and is known to be a Communist front organisation. I would not say that all of the people who are disturbed in respect of this matter are activated by Communist sympathies by any means; but there appears to be no doubt that the Communist Party and its front organisations are doing everything they can to create unnecessary fears in people’s minds. I would believe it true that that Party is always concerned with its own interests and those of its parent bodies, and not with the interests of Australia. I recall that in 1943 the Australian Communist Party advocated full conscription of Australians in order to protect the Soviet Union. But at a time before that, when the Communists had collaborated with Hitler in starting the war, they were opposed to any Australian participation at all in the war, because the Communists were then on the side of the Nazis.
– Can the Minister representing the Minister for National Development give an assurance that he and his Department are in touch with the developments in gas and fuel supplies being brought about by off shore drilling in Victorian waters? Is the Minister aware that fairly substantial sums of money will need to be found by the Victorian Government for the distribution of the gas finds? Will the Minister also give an assurance that this need for finance by Victoria in the next few years will meet with ready assistance from the Federal Government by way of a special project grant?
– 1 can give the honorable senator only an assurance that the Minister for National Development and his departmental officers are fully aware of developments in relation to gas and fuel supply off the Victorian coast. This has been a matter of complete study by the Department and the Minister, who is fully aware of the implications. 1 think it is a very heartening find which will be of immense advantage to Australia. I cannot give any other assurance at this stage on behalf of the Minister on policy and the other matters raised by the honorable senator. 1 suggest that he place his question on the notice paper so that the Minister may give him such answers as he thinks worthy of the question.
– Has the Leader of the Government in the Senate seen a report of a statement by the Minister for the Navy that he hoped Australian manufacturers would get more contracts for the sale of munitions to Vietnam? Does the Minister support this cynical dealing for private profit in war goods? If he does support this blood traffic, can he say whether it is only a coincidence that Australian sales of munitions to our allies are to be increased at a time when our contribution of the lives of conscripts and volunteers is also to be increased?
– I read the statement to which the honorable senator refers. I am certainly of the opinion that to be a strong nation Australia must be industrially strong. A strong and developing industrial defence potential is a great necessity for any nation which must make itself strong in order to defend itself. Therefore, any orders which can be obtained by commercial bodies in competition with the rest of the world - as is the case with offshore gas and fuel developments - will lead to the industrial development and strengthening of Australia’s defence potential. I repeat that it is essential for any nation to be strong industrially in order to be strong in defence.
– I address my question to the Minister for Customs and Excise because this matter involves administrative problems and I think it has constitutional implications. Has the Minister seen reports that there has been contact between Australian fishing boats and a Russian ship in the vicinity of Rocky Island, which is off the South Australian coast and well within the territorial limits of Australia? Has the Minister’s Department taken any action to ensure that quarantine and health pratiques have been observed in relation to the fishing boats which have returned to our shores after contact with the Russian ship? Did the Russian vessel enter an Australian port before entering Australian territorial waters? If it did so enter an Australian port, was quarantine pratique obtained? If this Russian ship has not entered an Australian port, has it paid the dues that arc required for lights on the Australian coast and adjacent areas? The Minister’s Department is charged with the responsibility for collecting such dues.
– The honorable senator has asked a very complex question based on a report he has read. I have not had the advantage of being informed of the circumstances to which he has referred. Therefore, I would prefer not to attempt to answer the question now, but I will have an investigation made and will supply the honorable senator with any information that is available. If it transpires from this information that the matter should be brought before the Senate for further discussion or by way of answer to the question, I will take the opportunity to meet such requirements.
– I direct a question to the Minister representing the Minister for Defence. What is the Government doing to help the Australian contractors who face huge losses in the North West Cape venture because of events beyond their control? To avoid hardship to suppliers, sub-contractors and workmen, will the Government press the Government of the United States of America to settle these outstanding claims without the delay, expense and inconvenience involved if the claimants are required to wait until construction is completed and then pursue their claims by private litigation?
– This matter is under consideration.
– I direct a question to the Minister representing the Minister for Primary Industry regarding the decision of the Australian Agricultural Council to terminate the agreements whereby the Commonwealth and various States contributed to the support of the Tractor Testing Committee and its tractor testing operations at Werribee in Victoria. In view of the valuable work done by the Tractor Testing Committee and its value to primary producers, when can we expect a reply to the Victorian Government’s offer to share the cost of providing’ this service with the Commonwealth Government on a fifty-fifty basis?
– I answered a question in the Senate last week on this matter. My reply was to the effect that the tractor testing had ceased because the service was not being used. If there is fresh evidence that the tractor testing is needed and the Victorian Government has made this offer, I will convey the honorable senator’s question to the Minister for Primary Industry and get an answer for him.
– I direct a question to the Minister representing the Minister for Shipping and Transport. In view of the stated policy of the Government relating to Australian coastal shipping to the effect that Australia is to maintain a competitive position in relation to private shipowners, including overseas interests which may wish to enter the Australian coastal trade, why has a special permit been granted to the overseas owned tanker “ British Corporal “ to load oil for Tasmania under charter to Mobil Oil Aust. Ltd. when the Australian owned and operated company, R. W. Miller & Co. Pty. Ltd. was told that there was no cargo for its tanker until the end of April and its tanker was diverted to wheat carrying rather than remain idle in an Aus tralian port? Will the Minister state exactly why the Government is discriminating against the Australian owned and operated R. W. Miller & Co.?
– The honorable senator asked a question and then proceeded to make some statements which I would challenge in debate, but since this is question time it is sufficient to say that I do not accept the statements made by the honorable senator regarding discrimination against Australian shipping. The question related to the British owned tanker “ British Corporal “. This tanker was issued with a permit under the Navigation Act by the Department of Shipping and Transport to enable it to load petroleum products for Tasmania because there were no Australian licensed ships available within a reasonable time. The Department was satisfied that if a permit had not been issued, there would have been dislocation to the normal petrol supplies available in Tasmania. This should be a matter of concern to any honorable senator from Tasmania. The ship which, according to the original intention, was to take the cargo was the tanker “ Australian Progress “. This vessel has been undergoing repairs in Sydney. Those repairs were due to be completed on 14th March, but because of the strike the work is still not completed. The date of completion is indefinite, but the earliest by which the work could be finished would be 1st April. If the “ R. W. Miller “ had remained on the Australian coast and had not taken an overseas assignment, it would have been available. It is ironical that the seamen should strike to prevent the “ British Corporal “ from obtaining a cargo when it was due to a strike that an Australian flag ship was unable to obtain the cargo and it became necessary to issue a permit to a foreign flag ship to do the job.
– My question is addressed to the Minister representing the Minister for Labour and National Service. I refer to my question of 2nd December 1965 when I asked whether the Government had given further consideration to the repealing of section 49 (2) of the Public Service Act. This section states that every female officer shall be taken to have retired from the Public Service upon her marriage unless the Public Service Board certifies that there are special circumstances which make her employment desirable, and it prohibits the employment of an already married woman either permanently or temporarily unless the Board gives a similar certificate. This requested repeal is a matter of very real importance to many women. The valuable contribution of women, who comprise one fourth of the work force of Australia, and the growing demand for their services are widely acknowledged. I again ask the Minister whether a favourable decision has yet been reached.
– The matter raised by the honorable senator is still under active consideration by the interdepartmental committee to which it has been referred by the Government. It is expected that the report of this committee will come before the Cabinet in the near future.
– Can the
Minister representing the Prime Minister state why the Commonwealth Public Service refuses to deduct from the salaries of its employees moneys which they nominate for payment to their respective credit unions as savings, particularly when State Government departments make such deductions? Will the Minister inquire into the matter and ask that the request of the Commonwealth Public Service organisations be agreed to?
– Yes, I shall consult with the relevant Minister.
– I address the following question to the Leader of the Government in the Senate: ls it not a fact that freedom of speech is one of the most cherished and valuable freedoms that we possess in Australia? Is it not essential to true democratic government that parliamentarians should have that freedom unquestioned? Does the recent public reprimand of some Australian Labour Party Federal parliamentarians for some of their public statements indicate a growing desire within the Federal Executive of the Australian Labour Party to take away freedom of speech from at least some of the Australian people?
– How much say has the honorable senator got at the Liberal conference? Why not talk about democracy there?
– Order !
– What is the honorable senator talking about?
– Order! Senator Cant will remain silent.
– I rise to a point of order. The question did not refer to any matter that was mentioned by any member in the Parliament. The matter in question was one of domestic concern for the Australian Labour Party and, in accordance with your rulings, Mr. President, docs not come within the sphere of administration or responsibility of the Minister. I ask that the question be ruled out of order.
– The point of order is not upheld.
– This is a very telling and pertinent question, as is obvious from the reaction of the’ Opposition. I quite agree that in the Western world freedom of speech is cherished. I quite agree also that people in other countries would welcome the opportunity for freedom of speech that we have in the Western world. I have noted with great interest that public statements made by some members of the Parliament recently with reference to the leaders of the Australian Labour Party and other matters have been withdrawn and apologies made. Whether that has been done under pressure, I am not in a position to say. But I have noticed that the recent reference to members of the Executive as witless - I thought it was very rude and uncalled for - has been withdrawn and that other statements have been withdrawn and apologies have been made. I suggest that these retractions have been made under pressure and I suggest that this is an attack upon the freedom of speech of members of Parliament.
– 1 direct to the Leader of the Government in the Senate a question which is supplementary to the question asked earlier by Senator Murphy. I preface it by saying that it relates to the nonpayment of debts by contractors aC the North West Cape base. I ask the Minister: Have the workers at the North West Cape base on three occasions had to go on strike in order to receive their wages from Electronics Ltd? If so, what action is the Government taking to protect the wages of the workers employed on this base?
– I oan give no other answer at the moment than that the whole matter of this base and the contract’s are under consideration at present by the Government.
– I direct a question to the Minister representing the PostmasterGeneral. I am prompted to do so, let me say by way of preface, by the prominent news item that the “ Sydney Morning Herald “ published this morning, alleging that a report of an interdepartmental character had been received by the Government, recommending the constitution of a separate body for the control and presentation of educational television. I ask the Minister to recall that it is, I think, upwards of 21 years now since this Senate constituted a committee which subsequently put before the Parliament a report recommending that educational television should occupy the Government’s earnest consideration. Has the Government received a report of an inter-departmental committee or from people appointed by the Government on the subject of educational television? If so, will the Minister table it in the Senate? Will he indicate how long it will be before the Senate will be advised of the action, if any, on that subject that the Minister proposes to submit to the Parliament for its approval?
– A report has been received by the Government. It is intended to present that report to the Parliament before this session closes, and it is hoped that, at the time when it is presented, the question of action, if any, will be made clear to the Senate.
– Has the Minister representing the Minister for Labour and
National Service seen a Press statement from Melbourne, dated 12th March, which reports a senior official of the Department of Labour and National Service as having said that his Department had begun investigating cases in which national service registration cards had been destroyed, that the youths would be asked to produce cards, that if they could not they would be liable to a fine of $100, and that those fit for service would probably have their deferments cancelled and be called up immediately? I ask the Minister: Does this report correctly indicate the intentions of the Government regarding these cases, particularly in respect of what appears to be a reprisal action concerning accepted grounds for deferment? If not, will the Minister take appropriate action to clarify the position?
– I should like the honorable senator to put that question on the notice paper so that the Minister for Labour and National Service may give a considered reply in which, I am sure, he will take into consideration what the law is and that the law should be applied.
– Will the Minister representing the Minister for Territories advise when the proposed Tourist Board will commence to operate in Papua and New Guinea? Will the Minister also advise why equal representation with Europeans on the committee will not be granted to Papuans and New Guineans?
– That question should be put on the notice paper so that the Minister for Territories can supply an answer. I take it that the honorable senator knows what he is talking about and that he is sure of his facts in his reference in the second part of the question. We shall see whether he is when an answer is received from the Minister for Territories.
– My question is directed to the Leader of the Government in the Senate. Is the Minister aware that the Australian National University Liberal Club last week passed a resolution condemning the sending of conscripts to Vietnam and decided to send a letter to the Prime Minister protesting against the Government’s decision? Has this protest been received by the Government? K it has, does the Government regard the Australian National University Liberal Club as part of Australia’s fifth column?
– I am not aware whether the Government has received such a protest from the Australian National University Liberal Club. Of course, in this country there is still a free society. People who believe certain things are free to make representations to any government. I am not aware that any such resolution has been passed by the Australian National University Liberal Club. I have no further information to add.
– I would like to direct a question to the Minister in Charge of Commonwealth Activities in Education and Research. Is the Minister aware that the clubs which are known as Liberal Clubs in all the Australian universities are not affiliated elements of the Liberal Party of Australia?
– Yes, I am fully aware of that fact, and I have been told, although I am not fully aware of it, that the A.L.P. Club at the University of Sydney, which recently said that it would raise a fund to send assistance to the Vietcong, is not closely affiliated with the Australian Labour Party; but I cannot swear to this.
– I direct a question to the Minister representing the Minister for Health. By way of preface, 1 refer to an answer that I received from the Minister on 23rd March, which indicated that the Australian Agricultural Council had called a meeting to deal with the present outbreak of Newcastle disease in the poultry industry. It was indicated also that the Council intended to examine the effect of Newcastle disease on interstate trade. I now ask: Can the Minister advise whether anything positive has emerged from those discussions?
– Knowing the honorable senator’s interest in this matter, I have obtained some additional details concerning it. A further meeting of the Veterinary Consultative Commit tee on Newcastle Disease was held in Sydney on 23rd March. A very considerable amount of survey work carried out revealed that although reactors to the laboratory test for Newcastle disease were widespread in Australia, the infection did not then appear to be causing any ill health or loss of production in the poultry industry. The Committee considered that the prohibitions and other precautions previously imposed had been justified. It added that survey work, but more especially surveillance of poultry flocks, should be continued to detect any possible change in the behaviour of the virus. I am informed that Victoria has removed all restrictions and that no restrictions are imposed in Queensland, New South Wales or the Northern Territory. The matter of lifting or retaining restrictions in the other States is solely a matter for the States concerned.
– My question is directed to the Leader of the Government in the Senate. Has the Minister seen a statement, attributed to the Minister for Defence, that it is unfortunate that the burden of fighting the war in Vietnam should fall on so narrow a front of the Australian people and that perhaps we may see it widened? In view of Senator Wright’s suggestion in this chamber last week that all eligible men between the ages of 20 and 35 years should be considered for service in Vietnam, are we to assume from the statement by the Minister for Defence that Senator Wright’s suggestion is being considered by the Government?
– The question relates to a matter of policy. The Government’s policy of calling up youths for compulsory national service has been made quite clear. The honorable senator knows the terms of that policy. If the Government intends to alter it, an announcement will be made.
– I direct my question to the Minister representing the Minister for the Army. Are Australian troops who are being trained for duty in Vietnam given lectures on the use of antitank and anti-rocket missile guns, which they are told will be used in Vietnam, and are they not allowed to handle or fire such guns while training in Australia?
– I am not in a position to say whether what the honorable senator has stated is correct.
– The Minister does not know?
– I do not know. If the honorable senator desires the information, I will make inquiries from the Minister for the Army and furnish him with a reply.
– My question to the Leader of the Government in the Senate relates to a question asked earlier by Senator McManus. who complained that certain action against the Government’s conscription policy had emanated from the headquarters of the Communist Party of Australia in Melbourne. I ask the Leader of the Government: Is the Communist Party-
– Mr. President, I raise a point of order. I made no reference in my question to the headquarters of the Communist Party or to Melbourne. I referred to Sydney and to the Australian Congress for Peace and Disarmament.
– Is the Communist Party a legal political party permitted under the Constitution of Australia-
– Order! In view of Senator McManus’s statement that he did noi refer to the matters mentioned by Senator Cant, I cannot allow the question.
– I will ask the question without any preface.
– The honorable senator may ask the question without the preface.
– Without any preface, I ask the Leader of the Government: Is the Communist Party a legal political party permitted under the Constitution of Australia as approved by the people? Within the Australian democratic system of government is the Communist Party allowed a voice in the community? If so, is it to be placed in a position inferior to the Australian National Socialist Party or the Fascist Party?
– The Australian Communist Party is freely recognised in Australia in accordance with the Australian Constitution. It certainly has a voice. Not only is its voice heard outside the Parliament but sometimes one hears it echoed inside the Parliament.
– That is allowed.
– Yes. As I have said, its voice is sometimes echoed inside the Parliament.
– My question is addressed to the Minister representing the Prime Minister. In view of recent reports that the Mirage assembly and building programme has again fallen behind schedule, will the Minister advise when the last of the Mirage fighters will be delivered to the Royal Australian Air Force?
– Contrary to the honorable senator’s information, the Mirage project is not behind delivery schedule. I do not have the actual figure of the number that have been delivered to the Royal Australian Air Force; but the deliveries and the number of aircraft ready for testing are well ahead of the programme which was originally arranged for the R.A.A.F.
– I address a question to the Minister representing the PostmasterGeneral. It is supplementary to the question asked by Senator Wright concerning the report of the committee on educational television, the so-called Weedon Committee. The Minister has replied that the report will be tabled during the present session and that the Government’s decision as to what action, if any, will be taken on it will be made known at that time. I ask the Minister: ls there any good reason why that report should not be made public immediately or, indeed, why it should not have been made public some months ago when it was first presented to the Australian Broadcasting Control Board? Does the Government not recognise that much public good could come from the responsible discussion of the report and its recommendations by television authorities and by other interested and representative citizens and groups who have some care and mind for the future of Australian television? Why cannot the report be made public straightaway?
– In this and related matters, the Government thinks there is considerable advantage, when presenting a report of a special committee to Parliament, to indicate at that same time to the Parliament what it has in mind to do concerning the report. This procedure enables a debate to take place here and in public on whether the action contemplated is correct or whether it should be added to. This course permits that debate to take place before the Parliament has to lake any specific action on the report. As the proposals of the Government are submitted at the same time as the tabling of the report, an informed and more extensive discussion is permitted.
-I direct a question to the Minister for Works in that capacity and also in his capacity as Minister representing the Minister for Labour and National Service. The President of the Commonwealth Conciliation and Arbitration Commission has repeatedly reported that accommodation and facilities necessary for the efficient functioning of the Commission in Sydney have not been provided. How long does the Government intend to neglect taking remedial action?
– The question has been addressed to me in two capacities that I represent. I will reply first as Minister for Works and, in doing so, I remind Senator Murphy that what the Department of Works does is to carry out the requirements of some other department which supplies money and plans to it. Regarding the question directed to me as Minister representing the Minister for Labour and National Service concerning action being taken on this matter, I point out that this is a matter of policy which that Department will ultimately decide.
– Mr. President, may I direct another question to the Minister representing the Postmaster-General? As the report of the inter-departmental committee on educational television has been made public, is any useful purpose served by now withholding that report from Parliament? Will the Minister tell us by what authority the report was made public?
– To the best of my knowledge, this report has not been made public. I have no knowledge of it being made public. If it has been made public, it should not have been, because it was a report to the Postmaster-General and not to anyone else.
(Question No. 773.)
asked the Minister re presenting the Minister for Trade and Industry, upon notice -
– The Minister for Trade and Industry has supplied the following answers -
(Question No. 785.)
asked the Minister representing the Minister for Civil Aviation, upon notice -
– The Minister has supplied the following answer to the honorable senator’s question -
It is assumed that the question refers to the liability of the airline to pay damages for death or injury of a passenger. A passenger’s own insurance cover is of course a matter between himself and his insurer. Regarding the liability of the airline the broad position is as follows -
Once again it is assumed that this refers to the liability of the airline. It should be understood that the terms and conditions of liability arc necessarily expressed in legal terms and that to try to paraphrase them in day to day language could result in unavoidable distortion of their precise meaning. The Civil Aviation (Carriers Liability) Act 1959- 1962 is the Commonwealth legislation on this subject.
(Question No. 792.)
askedthe Acting Minister for External Affairs, upon notice -
– The answers to the honorable senator’s questions - significantly, all the answers begin with “ No “ - are as follows -
(Question No. 800.)
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has supplied the following answers -
South Coast -
( Question No. 821.)
asked the Minister representing the Treasurer, upon notice -
During the last five years, what reports and other documents have been filed by the Commonwealth of Australia with the United States Securities and Exchange Commission?
SenatorHENTY.- The Treasurer has supplied the following answer to the honorable senator’s question -
As required by United States law, each time the Australian Government makes a public issue of securities listed on a stock exchange in the United States, it is necessary to file with the Securities and Exchange Commission in Washington a registration statement containing information on the Australian economy and details of the agreements being entered into by the Commonwealth, together with a number of related documents. There have been seven such issues in the past five years.
In common with other foreign governments with securities listed on United States stock exchanges, the Australian Government supplies annually to the Securities and Exchange Commission statistical documents and other published information relating principally to the public debt and balance of payments.
Debate resumed from 24th March (vide page 236), on motion by Senator Anderson -
That the Bill be now read a second time.
– The purpose of the measure before the Senate is to amend the Australian Coastal Shipping Commission Act 1956-62 in order that the Australian Coastal Shipping Commission may be able to extend its borrowing powers and obtain greater flexibility in its operations. Although the Opposition welcomes this legislation to remove the limitations on the amounts of money that can be borrowed by the Commission, we must also direct the attention of the Government to the attitude adopted by the Opposition over the years on this issue. We believe that at long last it has dawned on the Government that the efficiency and efficacy of the Australian National Line have been proved.
Through this legislation, the Government is virtually recapturing the spirit of the 1 949 legislation which provided for a strong, expanding and virile shipping line that would play its part in the economic life of Australia without any hamstringing or similar limitations.
– If I recollect the 1949 legislation aright after 17 years, it required that each private shipowner should have a licence before he should operate, did it not?
– I understand that is true, and the same thing applies today. We have heard the Minister expounding on the granting of licences to operate on the Australian coast.
– By virtue of what provision does that operate today?
– By virtue of the fact that licences are granted by the Minister for Shipping and Transport - special licences for overseas ships if they wish to operate on overseas trade.
– That is a different matter, under the Navigation Act.
– The honorable senator will have an opportunity to develop his point at his own time. His interjection brings into proper perspective the completely negative and short sighted attitude of the Government in respect of the inevitability of economic history. Any government that sticks to the old worn out philosophy of laissez faire in relation to private enterprise badly needs a spring cleaning. The need for a review of this Government’s ideas is indicated by the fact that in 1956 the Government found it necessary to give some borrowing powers to the Australian Coastal Shipping Commission. This was done after the Government had tried to sell Commonwealth owned shipping by hawking it around the world because government ownership offended the policy of the so called Liberal Party. The Government, in accordance with this policy, sold Amalgamated Wireless (Australasia) Ltd. at a minimum price. lt sold the interests of the Australian Aluminium Production Commission to overseas interests. In every way it has taken a negative line by selling government enterprises and these activities will prove continually to be to the disadvantage of Australia.
Now the Government belatedly realises that it must alter the economic philosophy it has been pursuing if Australia is to compete with overseas organisations and give the country the sea transport facilities it needs. The mere fact that only 16 months after legislation was previously before the Parliament the Government has found it necessary to increase the .borrowing powers of the Australian Coastal Shipping Commission from a maximum of $10 million or £5 million to an unlimited amount at the discretion of the Minister for Shipping and Transport, proves that the economic facts of life and the needs of the day are catching up with the Government much more quickly than it expected. When a similar proposition was debated previously, the Minister took the stand that the Government could get around the limitations on borrowing powers if it were necessary.
– To what debate is tho honorable senator referring?
– I am referring to the debate in the House of Representatives in November 1964 when the Deputy Leader of the Opposition questioned the Minister. In his reply, the Minister said he would find ways and means of getting around the limitation but the Government did not expect such an eventuality to arise. It is most damaging to the Commission - -as it would be to any organisation - to find that a responsible Minister could not see more than 16 months ahead to the time when he would be forced by circumstances to bring in amending legislation such as this Bill. This Government’s approach to government owned enterprises amounts to a phobia. The governments of most other countries have seen through the stupidity of the philosophy that is followed by the political parties which form the Government in Australia. Every other country, whether it is girt by sea or landlocked, is entering into ownership of shipping on which it can rely as part of its defence set up. The economic facts of life are that Australia has lost countless millions of dollars in revenue because of the limitations on and circumscription of the activities of the Australian National Line.
– What circumscription?
– The mere fact that the Government will not allow it to expand. In his second reading speech the Minister for Customs and Excise (Senator Anderson) stated -
The Commission is faced with substantial capital expenditure over the next few years for the construction of new vessels which it has on order or intends to build, and for the erection of associated shore facilities.
Later I shall develop the argument that the orders that have been placed in our shipbuilding yards, the number of berths that have been left vacant and the alteration to the number of ships that are plying on tha
Australian coast are the result of the Australian National Line having had these limitations placed on its activities. 1 have before me the publication “ Australian Shipping and Shipbuilding Statistics “ for the period’ ended on 30th June 1965. Set out in this publication are figures relating to shipbuilding and the use of our shipyards. 1 propose to dca!, first, with the shipyards of the Whyalla Shipbuilding and Engineering Works m South Australia. That yard has five building berths for ships with a maximum tonnage of 50,000 deadweight tons. In the last five years eight ships have been built in those five berths. An ore carrier was built in 1961 for the Broken Hill Pty. Co. Ltd. The tanker “P. J. Adams” was built in 1 962 for Ampol Petroleum Ltd. The ore carrier “ Wollongong “ was built in the same year for Bulkships Ltd. In 1964 the “ Musgrave- Range “, a bulk carrier, was built for the Australian National Line. Then the “ Seaway King “ and the “ Seaway Queen “, two minor vessels of 3,000 tons, were built for the Union Steam Ship Co. of New Zealand Ltd., and in 1965 the “ Gerringong “ a bulk carrier, was built for Bulkships Ltd. This vast enterprise in South Australia could be regarded as being a very important section of our economy. It could provide for training in and the development of techniques far both peace and war. Of course, the Government does not admit that we are at war. But it must admit that, as this is an island continent, shipping is one of our sinews of war and is just as important as are the soldier in the field and the aircraft in the air. In spite of that, we see only a relatively poor effort on the part of the Commonwealth Government to keep our shipyards up to their fullest productive capacity. I repeat that at Whyalla only eight ships were built in the last five years.
Now I come to statistics relating to vessels under construction. The “ Darling River “, a bulk carrier of 47,500 deadweight tons, is to be completed in April 1966. The “ Bogong “, a similar vessel, is to be completed in 1967, and an unnamed vessel of the same weight is to be completed in July 1967. Those three vessels are on order at Whyalla.
– They are under construction.
– Yes, but they are not completed. The State Dockyard in New
South Wales has three building berths. It has built three vessels in the last five years. The Naval Dockyard at Willia’mstown in Victoria has four berths, but it has not built any ships in the last five years. 1 had occasion to visit the shipyard of Evans Deakin and Co. Pty. Ltd. some time ago. I was delighted to see its potential and the standard of its technicians and management. That firm has three berths available and is capable of building ships of up to 20,000 tons. Three ships have been built at this yard in the last five years. They are the “ Troubridge “, an 850 ton vessel which was built for Adelaide Steamship (Operations) Ltd.; the “ Kangaroo “, a passenger/ cargo ship of 2,233 tons, which was built for the State Shipping Service of Western Australia; and the “Jeparit”, a general purpose bulk carrier, which was built for the Australian National Line. I repeat that Evans Deakin and Co. Pty. Ltd. has built only three ships in five years. In my view, that is a very serious waste of shipyard facilities and of the talent that is available to our shipbuilding industry. The training of shipbuilders should be part of our national service. They should be right up to the limit of training in preparation for a time of national emergency. The firm of Walkers Ltd. of Maryborough, which has a relatively small yard of two berths, has not built a ship in the last five years.
– Will this Bill help them?
– I sincerely hope it will. I hope that the Australian National Line not only will be able to place orders and to keep all these shipyards at full capacity but also will create a demand that will lead to their capacity being increased, as it was during the last emergency, when most of them were developed to their present standard. None of these shipyards has developed in almost the last 20 years during the term of office of the Libera] Government. That is a tragedy. They have more or less remained stationary over that whole period. Orders should be coming from the Australian National Line not only for vessels for the coastal trade but also for vessels to trade to New Guinea and New Zealand and also to carry our wheat and wool to other parts of the world. This is a very important part of our economy.
– I am not sure that I heard the honorable senator correctly. When he said that the shipyards were stagnating, did he refer to the Evans Deakin yards?
– I did not mean to imply that their standard has deteriorated. What 1 meant was that they have not expanded and have not been able to progress recently because of lack of orders.
– That firm has made fantastic progress and has expanded.
– The reports do not show that the shipyards have made any great progress, particularly when we look at the position of Walkers Ltd.
– I am referring to Evans Deakin and Co. Pty, Ltd.
– Well, that firm has had the “ Accolade “ under construction, the keel having been laid in 1.964.
– That firm has doubled its work in the last five years.
– Well, why do not the statistics show what it has done? I have mot been up there to see what it is doing. 1 can only take the official documentary evidence that I have.
-~I can get the information for the honorable senator.
– The statistical report I have shows that this firm has three building berths, that the maximum tonnage of vessels which could be built is 20,000 deadweight tons, and that when a new building dock is completed the maximum building capacity will be increased to 50,000 deadweight tons. That might be the development that Senator Morris is speaking about.
– It is.
– These statistics show that Evans Deakin and Co. Pty. Ltd. has had under construction the “ Accolade”, a limestone carrier of 3,250 tons. The keel was laid in December 1964, the launching date was November 1965, and the completion date is given as December 1965. Whether that ship has been launched I do not know. Those figures give an indication of the capacity to which this shipyard has been working. The yard is in Queensland where vast resources of coal are being tapped. The development of the
Weipa project will necessitate the transport of vast quantities of bauxite to other parts, particularly to Tasmania. Money is being expended on roads in north Queensland to develop the cattle industry. These developments in turn will necessitate the transport of goods from Queensland along the whole of the Australian coast, including the coast of Tasmania. Later, I shall refer to the annual report of the Australian National Line in relation to plans for the development of Tasmanian shipping. This comes under the section dealing with funds needed to finance such a proposition.
– What information has the honorable senator that any of the funds that the Commission will borrow if this Bill is passed will be used for Australian shipbuilding.
– The Australian Coastal Shipping Commission stated in its annual report -
During the 12 months, outgoings in respect of the acquisition of the “ Empress of Australia “ and the “Musgrave Range”, both of which were commissioned; the 47,500 tons deadweight bulk carrier now being built and due for launching in January 1966; the completion of the Sydney terminal; land on the Brisbane River and additional cargo handling equipment; have amounted to £3,600,000 and, for this purpose, the capital of the Commission was increased, as already reported. Meanwhile since the end of the financial year, a second large bulk carrier of the same tonnage has been ordered to maintain the position of the Australian National Line in the ore carrying trade.
Again the extreme difficulty of maintaining general cargo services around the Australian coast by the use of orthodox ships and cargo handling methods, saving at very heavy loss, has been amply demonstrated. The Commission has therefore called tenders for three large vehicle-deck vessels and in so doing will extend the “ container “ principle of transport over a far wider field. For this and other plans in hand or in view, additional finance, preferably by way of borrowings will be necessary . . .
Throughout the twelve months the demand for tonnage in the Australian ore and bulk cargo trades has been such that no overseas voyaging could be undertaken. Officers of the Australian National Line, however, continue to watch the freight market with a view to taking advantage of any favourable development.
– The honorable senator has not failed to notice that Mr. Whitlam said in October 1964 that Australian shipbuilding yards were fully engaged?
– That is not borne out by the statistics.
– Senator Wright is not implying that that is the position at the moment?
– Certainly not.
– In reply to the interjection by my Deputy Leader, let me say that Senator Wright is asking about some statement made in another place in 1964. I have already read from the statistics at 30th June 1965, which show that practically every shipyard which is under review is not working at full capacity. Other than at the new building dock at the Evans Deakin yard, no activity has been reported. As a matter a fact, the Cockatoo Docks and Engineering Co. Pty. Ltd. at Sydney has no vessels under construction. Adelaide Ship Construction Pty. Ltd., Birkenhead, South Australia is engaged in the construction of tugs. It holds the sole Australian patent rights for the hydroconic form of hull construction. The report shows the number of ships built in the last five years. I have mentioned the position of Walkers Ltd. The report does not present a picture of a virile industry that this country should expect the Government to be sponsoring and fostering to the greatest possible degree.
There is a great need for co-ordination of transport generally. Under an agreement, two airlines carry the available air cargo. Only recently we had presented to us in the Senate a strong case for the establishment of another freighter airline to pick up the available cargo. A very weak defence was put up by the Government. That matter has, of course, gone to litigation and been settled in that way. Statistics show that Australia ranks as high as any other country in airmindedness and density of passenger traffic. The amount of air freight carried is proportionately much lower. Road transport companies are operating long interstate hauls on our highways. Everyone knows the state of traffic on the highways, the size of the transporters, and the conditions of drivers who are obliged to take periodic rests. To relieve the roads of this strain, alternative methods of transport other than air transport should be available. This is obvious from the statistics presented by Ipec-Air Pty. Ltd. Whether or not the airlines agreement will provide for more freighters for the two monopoly airlines we shall see in the future. For more than half a century the railway systems have been inadequate because of the different railway gauges. Loading and unloading are most costly operations.
This brings us to the growing responsibility that coastal shipping must bear in the future of our transport complex. The advent of the roll-on roll-off vessel and the palletisation and mechanisation of cargoes have practically revolutionised the coastal shipping trade. Yet right up until now the Australian National Line has been stultified in relation to enlargement of its operations. The Minister stated, in his second reading speech -
Other Australian shipowners can, through the availability of long term finance at reasonable rates of interest, set up a relationship of ordinary share capital to loan borrowings which permits them to achieve a higher earning rate . . . than would be the case if their capital were wholly in the form of share or equity capital.
Under the Act as it now stands, the Commission has no such freedom.
I believe that the Government stands condemned for admitting that the Commission had no such freedom.
If we look at the annual report of the Australian Coastal Shipping Commission for 1965, we find that the current and fixed assets at cost less depreciation totalled £28,792,542. On the question of return on this investment to the Government, we find that the Commission has provided £1,100,000 for income tax. Perhaps this is a result of the Government’s phobia which causes it to insist that its own organisations shall pay income tax. I suppose that the Government feels that the position looks better on paper if the costs of running the Australian National Line are equal to the costs of the lines run by private enterprise. In the inflation that is taking place in this country costs are going up. The advantages of mechanisation and other techniques that are being used today are being absorbed by higher costs. In this situation we have this deliberate policy by the Government to charge the Australian National Line £1,100,000 in income tax for the year ended 30th June 1965. In the previous year income tax provision totalled £1,250,000. The dividend that the Commission had to pay to the Government was £985,507 for th« year ended 30th June 1964 and £772,878 for the year ended 30th June 1965.
These impositions which have been placed on the Australian National Line just for the purpose of making its costs equal to those of private shipping companies, indicate that the Government would rather keep costs high than abandon its fallacious laisser faire idea that private enterprise should not be interfered with. But the figures to which 1 have referred and the inflationary process that is occurring are forcing the Government to the realisation that a national overseas shipping line is the only means’ by which the. primary and secondary producers of this country can compete wilh overseas producers. Such a line could supply transport to them at a minimum cost. T. do not think that it should be a profit making concern as long as it is able to pay, if necessary, a basic rate of interest - even subsidised interest - on long term finance and is able to transport the goods of the primary and secondary industries. If the effect of reduced costs to the supplier is handed on to the Government through the activities of the line, it must be for the national good.
Other items place very heavy burdens upon the Australian National Line and prevent it from being able to contribute its best efforts towards keeping costs down. Earlier today, in the form of a question without notice, I drew attention to the fact that the tanker “ British Corporal “, which is owned by the British Petroleum Co. Ltd., is to load oil for Tasmania. ] have referred to the sell out of Australian industries when this Government came to power and its phobia about government owned activities. The Government was able to exclude Australian companies from participation, to a great extent, in the production and distribution of motor fuel on a level at which it could hold that particular section of the economy in check. As a consequence, overseas interests practically control this vital commodity on which virtually the wheels of our industries are lubricated and rotate. Instead of the Government retaining an interest in the oil industry, we have seen, even since the discovery of oil in Queensland, the pressures that have come from overseas interests in Australia on the question of price and other factors.
British Petroleum which was able to buy In under this Government’s sponsorship, and which was aided and abetted by the Government, has now entered the coastal shipping trade to the extent that it is part of the designed discrimination against the
– Is the honorable senator on their side in this matter?
– It is not a matter of sides. It is a matter of the principle involved. If the Government is consistent at all, it should try to turn any business it can towards the Australian owned and operated company.
– I am asking for information. Has Miller an empty tanker available for carrying this oil to Tasmania?
– At present he has one proceeding to Australia from Hong Kong. When he loaded the wheat at Geelong in February he was advised that if he used his carrier to take that wheat there would be no other oil cargo available to him until the end of April. But oil cargo has become available in the meantime, and he is unable to take it. I have not interested myself sufficiently to find out exactly what is going on and how much the Miller company is being pushed around, but I know the form of the conference lines and the international shipping companies. They increased the freights on goods going to New Zealand and they would not allow Tasmanian apples to go to Indonesia in 1963 because they did not want ships to go to that area. Strong pressures, both internal and external, are exercised by conference lines and other shipping combines. Their influence of their lobby is so strong that the Government seems to bow to them every time.
At the outset I said that I welcomed this return to sanity on the part of the Government in the matter of its relationship with the Australian National Line. We on this side of the House have great admiration for the standards the Line has set in its organisation and for the efficient way in which its ships are run. Tasmanians are particularly thankful that such an organisation provides the lifeline between Tasmania and the mainland - the passenger and freight ferries. The record of the “ Princess of Tasmania “ can compare with that of any ship anywhere in the world. Recently she completed her two-thousandth crossing, without having ever disappointed the public by not meeting her schedule.
In my view, the “ Empress of Australia “ was sabotaged by Hobart interests. Members of all parties in this Parliament made representations to the Minister. The Australian National Line considered those representations and planned for the “ Empress of Australia “ to go to Hobart. In the meantime, the private companies bad been able to tie up the business that we believed was available for the “ Empress of Australia “. As a consequence, she is not able to get full cargoes from Hobart and has to call at Bell Bay and Burnie alternately. The Australian National Line is put to great expense as a result of this virtual sabotage of the “ Empress of Australia “, because the Australian National Line has to transport freight from the north west coast of Tasmania to Hobart to fill the cargo space available in the “ Empress of Australia “. It is only to keep faith with people in Tasmania and with the members of Parliament who stated a case on her behalf that the ship continues to run to Hobart. I believe the Line would be better off economically if the vessel ran only to the north of the island, the point nearest to the mainland. The people of Hobart then would have to pay the penalty for what virtually amounts to a breach of trust.
– In other words, road transport from the north of the island to the south is cheaper.
– It is. The Bass Strait puts Tasmania at a disadvantage in relation to any other State in the Commonwealth. In Queensland there are the alternatives of rail, road, air and sea transport in movement to other States. We in Tasmania have only air and sea transport open to us. If cargo can be rolled off a vessel, there is speed and efficiency; there is only one operation involved in loading at the point of consignment and only one in unloading at the point of destination. With the old orthodox vessels, it is necessary to load an article at the factory, unload it at the wharf, carry it across the wharf and load it into the hold of the ship, and then, at the other end, to lift it out of the hold on to the wharf, load it on to a lorry and then unload it at the factory. Many operations are involved, compared with only two with the new vessels. Economically, this new method is a tremendous advancement in handling cargo. One answer to our problems in Tasmania is these ferries, which are operating so efficiently. I regret very much that it has been necessary for the Australian National Line to bear the added burden of transporting cargo from the north to the south of Tasmania in order to keep faith with the people of Tasmania.
The legislation before us provides for funds to be made available for the construction of another vessel, a twin sister for the “ Princess of Tasmania “. There is no shadow of doubt that the “ Princess of Tasmania “ has assisted in great measure a very important part of our economy - the tourist industry. The number of people who have availed themselves of the relatively cheap transport to our island, tourist State-
– Compared with what is it relatively cheap?
– It costs very little more to be transported across the Strait than to stay at a motel for bed and breakfast. Of course, much depends on the motel at which one stays. There are motels which charge £5 for bed and 17s. 6d. for breakfast. That is £5 17s. 6d. for one night’s accommodation.
– Is this in Tasmania?
– Yes, and in many other parts of Australia.
– How much?
– £5 for bed without breakfast.
– Only Labour Party senators can afford that.
– Perhaps the place where the honorable senator stays is cheap, but I understand there are places in Canberra where it costs over £4 10s. for overnight accommodation.
– It costs £8 at the new motel.
– That is right. Senator Wright asked me: Compared with what is the fare on the “Princess of Tasmania “ relatively cheap? Having regard to the fact that the traveller is being transported over the sea at the same time he is sleeping, eating or using the facilities provided, the fare charged to travel on the “ Princess of Tasmania “ is low. The standard of the accommodation provided compares favourably with the standard of accommodation provided in motels. In fact; I believe that one receives better service on the ship. At a motel one has to carry his own port, pay his bill promptly and find his own way out.
– A traveller often pays before he goes to bed.
– That is right. It is a pretty tough business, compared with the courtesy and comfort that are available on the “ Princess of Tasmania “. The Australian National Line is doing a great service to the Tasmanian tourist industry. In addition, it has provided the regularity of service which is so important. If the Australian National Line is on the job, a person knows that his goods will arrive on time. Punctuality of deliveries is the lifeblood of business, and is something that we have not had in Tasmania for many years. For that alone, the Australian National Line is to be commended.
We support this measure because, as I have already stated, it allows the Australian National Line to expand its operations by giving it greater borrowing power. Despite the fact that the Commonwealth Government has this fetish for imposing on its own instrumentalities as many extra charges as it can in the form of the payment of dividends and income tax I believe that, whatever funds the Commission requires, the standards that are being set by it can only do credit to it and contribute greatly to the Australian economy.
– Madam Acting Deputy President, I rise to support the Australian Coastal Shipping Commission Bill that is now before hte Senate. I think it is only right and understandable that the debate on this Bill today should be led for the Opposition by a Tasmanian senator and that he should be followed by another Tasmanian senator. Shipping to our island continent is of great importance. To an island off the island continent it is of extreme importance. This Bill, I am glad to say, gives us the opportunity - indeed, the right - to have a look at the wide spectrum of shipping activities in Australian commerce. The Australian coastal shipping legislation was first before the Parliament in 1956 and was amended in 1964. In considering this Bill, we have the opportunity to look not only at the Australian Coastal Shipping Commission and tht Australian National Line but also at many facets of shipping and shipbuilding.
Senator O’Byrne, as he can always be relied upon to do, introduced today his pet enemies, shall I say - capitalism, private enterprise and overseas shipping companies. He repeated his oft spoken criticism of this Government for carrying out its political principles and ridding the Australian taxpayers of some of the costly enterprises that Labour had foisted upon them. Fancy a Tasmanian criticising the policy of this Government in regard to the Tasmanian aluminium industry at Bell Bay. When the shackles of government control were removed from that industry, it began to expand. It has continued to expand and in doing so has brought other industries to the area in which it operates. It has brought greater economic strength not only to that part of the island but also to the rest of
Tasmania. I remember one government enterprise in respect of which the then Federal Labour Government got out of its share. 1 ask honorable senators to cast their minds back to times before 1949. I look forward to the day when some member of the Australian Labour Party in Federal politics will be upstanding in his place, either here or in another place, and will tell the people the facts about the then Labour Government getting out of King Island scheel ite. When Labour members criticise this Government for getting out of industry, they never mention how their Government got rid of its share in King Island scheelite prior to 1949.
When 1 follow my friend, Senator O’Byrne, I find that politically we are poles apart. Perhaps in the context of this legislation I should say that I find my opinions to be oceans apart from some of the views that he has expressed. I wish to put on record what my thoughts are in respect of the Commonwealth Government operating the Australian Coastal Shipping Commission and the Australian National Line. I believe private enterprise is best suited and is in its correct role when it carries on this type of business. But the Commonwealth Government has a responsibility to the people of Australia, if an essential service is not being provided adequately, to come into that business. I believe that was true in 1956. It was essential for the nation’s welfare that the Australian Coastal Shipping Commission be established. The development that has since taken place has justified its establishment. I add to that remark my own personal view that if a Government, carrying out its responsibilities, decides that a government business undertaking or enterprise has to be conducted for the good of the people, that undertaking or enterprise should be properly, thoroughly and absolutely enabled to undertake its work.
Having outlined my principles in this matter - I will refer to the latter part of the remarks I have just made later in my speech - T think it is sufficient to say that this Bill will lift the ceiling on the amount of money that the Australian Coastal Shipping Commission may borrow. This amount is limited now to $10 million. The purpose of this Bill is to remove the ceiling. That could bc dangerous. I believe that the set up of the Commission and the provisions of this legislation provide sufficient safeguards from the point of view of this Parliament and the Australian people because permission for authority to borrow money for capital expenditure by the Commission has to be obtained not only from the Minister for Shipping and Transport but also from the Commonwealth Treasury. The annual report of the Australian Coastal Shipping Commission has to be submitted to Parliament. Parliament has the right to question the activities of the Commission and. ‘f it sees fit, to put a control on the activities of the Commission.
From the second reading speech delivered by the Minister for Customs and Excise (Senator Anderson), who is in charge of this Bill, we see that the current plans of the Australian Coastal Shipping Commission include the construction of two 47,500 dead weight tons bulk carriers and for two roll-on roll-off cargo vessels. As a layman - perhaps I am unwise in saying this - I question the advisability of the Commission ordering roll-on roll-off cargo vessels. Conventional ships, of course, are old fashioned and out of date. They must be replaced. We in Tasmania have found benefits accruing to us through the introduction of roll-on roll-off cargo ships. But I believe that the lime has arrived when new cargo carrying ships must be built as container ships, and container ships only. Throughout the world, in all spheres of transport, the eyes of those who know and the minds of those who think things out are beamed on containers for all forms of transport. So the container goes by vehicle to the rail head, from the rail head to the wharf and from the wharf to the ship. The procedure is followed in reverse when the shipping terminal has been reached. The days are rapidly passing when shippers will want to put a vehicle containing cargo on a ship.
I suppose that, before rising to speak in this debate, I should have found out what progress has been made on these two roll-on roll-off cargo vessels, but I trust that they will be the last that the Commission will order, unless very powerful considerations persuade it to do otherwise. I do not think we will see private enterprise throughout the world going in for roll-on roll-off cargo ships. I believe that the trend in future, to cut expenses and to speed up the turnround of ships, will be towards container ships, and I hope that the Australian Coastal Shipping Commission will keep that aspect of the changing world of shipping well in mind. We are told that the construction of a second Bass Strait ferry is still contemplated. I will have something further to soy in respect of Bass Strait shipping a little later.
I revert to my point that if a government sets up a business undertaking, that undertaking should be set up on business lines and should be run by itself. I am pleased to support this Bill because it will at least give the Commission a financial structure which will make it the equal, in respect of facilities available to it and ability to compete, of its private enterprise competitors. I do not think there should bc any strings or: a government business undertaking when it is in direct competition wilh private enterprise. Its financial facilities and structure must be such as to enable it to develop as need requires so as to fill the role that the Parliament gives to it. Senator O’Byrne appeared to be somewhat critical of the Government because it expects the Commission to finish a financial year with some reasonable return on capital. I believe that is essential when the taxpayer’s money is invested in a governmental business undertaking which is - and rightly so - in opposition to private enterprise. If the Commission is required to show a nominal return on its capital, that makes for efficiency in the running of the service. Surely that is what we, as a Parliament, expect of a governmental business undertaking.
The Minister gave another reason for wanting this Bill to be passed into law. It was to make sure that the Australian Coastal Shipping Commission would be suitably placed if overseas interests wished to enter into the Australian coastal trade. Evidently there is a feeling that they may wish to do so.
– Is that what the Minister said in his speech?
– Yes, I must, of course, put my own interpretation on what the Minister said. The Australian National Line is engaged in the Australian coastal trade and evidently the Minister thinks that overseas interests may be casting an eye on that trade. He wants his Department’s business undertaking to be so placed that it can meet such competition from outside Australia. If I am correct in that, I give him full marks for his attitude.
I want now to refer to the Tasmanian aspect of Commonwealth shipping activities. 1 have already said that 1 approve of the existing situation. The Australian National Line is operating on the Australian coast, and I acknowledge the great value to Tasmania of the work of that Line. But I want to return to my point that if the Commonwealth is to be engaged in shipping, its shipping line should run itself completely. I believe that at present it is being restrained and is being made to be inefficient because it has to have links with private enterprise, with which it is supposed to be in competition. There used to be “a ferry service across Bass Strait run by private enterprise and subsidised by the Commonwealth Government. I think that in the last year of subsidy the Australian taxpayers, in addition to other costs they had to meet, were paying £1,000 a day to subsidise that ferry service. I believe it is true - and not deserving of criticism - that in the days after 1949 this Government tried to get private enterprise to go wholeheartedly and efficiently into a modern Bass Strait passenger service. But private enterprise was not awake to the possibilities of such a service. I believe it now regrets that it did not take up the challenge in the early 1950’s and go ahead with providing ships such as the “ Princess of Tasmania “ and the “ Empress of Australia “. We find that the Australian National Line uses as booking agents, freight agents and shipping agents various private enterprise companies at various ports. I believe that because of that - and only because of that - the ships of the Line are not being run efficiently.
I long to meet someone who will say to me: “ I was able to book accommodation on either the ‘ Princess of Tasmania ‘ or the Empress of Australia ‘ when I wanted it, and, what is more, at the end of my holiday I was able to go back on the ship of my choice on the day of my choice “. I have never yet met anyone who could say that. I think the system of booking accommodation on the Bass Strait ferry and on the “ Empress of Australia “ is well nigh chaotic. If we are going to have a government shipping line, let it be run properly. I advocate that the Australian National Line be given the right to do its own bookings and to have its own agents, lt should not continue to dish its business out to private enterprise companies with which it is in direct competition. I have said that and I mean it. But I will not go on repeating it. I believe that the Government and the Minister for Shipping and Transport (Mr. Freeth) should have a look at the Line. I have no criticism of the ships, the manning of them or the running of them from port 10 port. They are a credit to the Line. They would grace any shipping line. However, I believe that the overall operation of the Line is spoiled because it is not in the hands of the Line’s organisation - the Commission. That is not the position of Trans-Australia Airlines, the Commonwealth Banking Corporation or any other government business undertaking. V believe that the Government should have another look at this aspect of its great, growing and valuable interest in shipping in Australia.
– In whose hands is the overall operation of the Line?
– I have said that various aspects are in the hands of various companies. I am not here to decry a particular company by name or to give publicity to a particular company.
– It is not fair to ask Senator Marriott the name of the company concerned. He is trying to achieve efficiency in the shipping industry and to make a contribution to the welfare of the Government.
– There is no harm in wanting to know what he is talking about.
– Senator Marriott knows what he is talking about.
– Order! Senator Marriott has the call.
– This Bill gives us an opportunity to look at the shipping industry in all its aspects. For that reason and because the Bill contains the means of giving the Australian Coastal Shipping Commission more life and the opportunity to develop, I support the Bill. I am grateful to the Government for introducing it.
.- As Senator O’Byrne has indicated, the Opposition supports this Bill which, in the main, is designed to remove certain financial strictures on the Australian Coastal Shipping Commission, which operates the Australian National Line, lt is significant that Senator O’Byrne, a Tasmanian, led for the Opposition in this debate; that he was followed by another Tasmanian; and that now I make the third Tasmanian in succession. That should indicate beyond any doubt that this matter is of vital concern to our State. Being an island State - this aspect has been well canvassed - Tasmania is dependent upon an efficient shipping service and an efficient air service. For the servicing of our trade, we require a regularity of services, a quick turnround and complete efficiency in the operation of those services. By and large, we do get those things.
We must be. very grateful for the endeavours that the Australian National Line has made over the years in the provision of the container type ships that now trade to and from Tasmania and which have had a distinct bearing on activity in that State in many different ways. Unfortunately, as is always the case in these matters, there are some shortcomings or disabilities. Senator Marriott has referred very properly to a number of the disabilities. I reside very close to the Devonport terminal. I am frequently at the terminal for one reason or another. It is quite remarkable to hear the complaints that people make about their inability to secure bookings on Australian National Line ships, one way or the other, from time to time. In fact, they often mention that they have to wait for 12 months or more to secure bookings on these ships for journeys between the mainland and Tasmania. That must have a very detrimental effect on that type of business.
The introduction of these ships has had some detrimental effects on the Tasmanian economy. We must look at the credits and debits of this type of shipping. I believe that it is apparent to anybody who has a close look at this matter that the introduction of this type of shipping to Tasmania, with regularity of services, quick turnround and efficient operation, means that industries, which otherwise might have set up industrial establishments in Tasmania to meet the Tasmanian demand, find it within the bounds of normal business practice to expand their establishments on the mainland sufficiently to cater for Tasmania’s requirements. They are able to load the products of their factories on to these ships and have the products in Tasmania, and frequently at their destinations, the next morning. So the results arc not all on the credit side. However, I would not for a moment like to leave the impression that we are in any way disposed against this type of shipping. We are very much in favour of it.
I point out to the Senate that the Australian National Line pioneered the type of service that is now operating between Tasmania and the mainland - the roll-on rolloff vessels. It is interesting to reflect upon the fact that these are composite vessels which cater for both cargo traffic and passenger traffic. The people who ought to know - those in authority - say that with a full load of passengers but a deficiency of cargo these ships would not pay; but with a full load of cargo they will pay even if they have no passengers on them. So it is essential that sufficient cargo and also sufficient passengers should be offering for these ships. I understand that these two composite ships - the “ Princess of Tasmania “ which was the first, and the “ Empress of Australia which followed - have been fully booked ever since their introduction. In fact, there has been a backlog of cargo. The Australian National Line has been unable to move all the cargo that has been offering. At the same time, the Line has been completely unable to meet the requirements of passengers who wish to take their cars or merely to travel as passengers on the interstate trips of these vessels. That is one of the drawbacks at the present time.
This type of service was initiated by the Australian National Line. Formerly we had ships such as the “ Nairana “ and the “Taroona”. They were old type ships. They operated between Tasmania and the mainland for many years. Apparently the companies that operated them made no effort to get with it, or to introduce modern loading and transportation methods. The Australian Coastal Shipping Commission introduced the present type of service and so took over the bulk of this trade. We commend this move towards modernisation of transport facilities which are very much needed by Tasmania. I am very pleased to see that it has proved to be such a success.
Despite representations which have been made consistently over the past few years to the Commonwealth Government for an additional ship of the type of the “ Princess of Tasmania “, I believe that as yet no firm order has been placed for its construction. After a design fs agreed upon and an order is placed for a ship, its construction and commissioning take a further substantial period of time. The increasing demands of the tourist trade will accentuate the necessity for a ship of this type. Tasmania will miss out until such a ship is commissioned. I would like the Minister to give an indication to the Senate that the Government is at least approaching the stage where a contract may be called for in respect of the construction of a ship like the “ Princess of Tasmania “.
For quite a long time, the problem of shipping interstate from Tasmania has been concerning industry. Last year Tasmanian members of this Parliament had made to them representations by the Tasmanian Timber Association asking that we do whatever we possibly could to ensure adequacy of shipping to Launceston. The inability of the Association to secure shipping space had a very detrimental effect on the Tasmanian timber industry because it could give no guarantee of a continuity of supply of timber to purchasers in Sydney and other parts of Australia. The Tasmanian timber industry was rather badly hit as a result. One would think that in view of the circumstances every endeavour would be made to ensure that where trade was offering, the necessary shipping space would be found and provided so that the trade and commerce of Tasmania could continue.
Senator Marriott touched on a point which has exercised my mind for a long while. I refer to the question of giving autonomy to the Australian National Line. Although the Australian National Line has the right to build, man and provision its ships, it is required to approach an opposition shipping company to carry out the necessary advertising for cargo, find suitable runs and then pay commission.
– By whom is the A.N.L. required to do that?
– I understand that the honorable senator will be able to speak later in this debate. I will leave it to him to develop his own address. 1 will go on with mine.
– It is not required by anybody or anything to do that, except by its own judgment.
– 1 repeat, Mr. President, that the Australian National Line has not the right at the moment, as I understand it, to seek cargo on its own account for carriage in its own ships. It has to go to another organisation to which it pays commission for the work that the other organisation is supposed to do. lt seems to me that offices of the Australian National Line are, in the main, getting cargo for the Line’s ships. The position is that the Line goes after the trade, fills its ships with cargo, and then for its trouble pays commission to an opposition company. I think it is not good enough. I think this is the aspect to which Senator Marriott was referring and I completely agree with him that the Australian National Line ought to have these restrictions removed.
This Bill seeks to remove sub-section 6 of section 30 of the Act so that one restriction upon the operations of the Australian Coastal Shipping Commission may be lifted. I strongly suggest that, while we are about it, some attempt should be made to remove the other restrictions. Surely the A.N.L. ought to be autonomous. Surely it ought to be able to stand on its own feet, as I think it can. Probably one of the reasons for the restrictions is that if the Line were unrestricted it would provide too much competition for the other shipping services. It is therefore brought back to the field. Those people who seek to use the services of the A.N.L. are the sufferers in the long run, because the pace is set, as it were, by the slowest of the field. lt is not good.
The Australian National Line ought to be able to operate, as Senators Marriott and O’Byrne said, in the same way as do Trans-Australia Airlines and Qantas Empire Airways Ltd. Both airlines receive, handle and deliver their own cargo. I do not believe that there would be a great deal of difficulty in setting up agencies for the A.N.L. Throughout Australia, particularly in the capital cities and in some of the secondary cities, booking offices for T.A.A. are established, ft ought to be possible to set up some sort of association between the Australian National Line, T.A.A. and Qantas. There is no reason in the world why this arrangement could not be made. May I suggest that the Minister have a look at this proposal. The offices and staff are there and an association should be set up between these transport organisations.
– It is ridiculous to think that the A.N.L. must hand over its booking arrangements to its opposition.
– That is right.
– Does the opposition company receive commission on the total volume of trade that is handled by the Australian National Line, or on the proportion that it sells?
– lt is not possible to book with the A.N.L. Booking is done through an agent, the Union Steam Ship Co. of New Zealand Ltd., which is a competitor of the A.N.L. I understand that at the time of the introduction of the roll-on roll-off type of ship, the Union Steam Ship Co. of New Zealand Ltd. and others said: “ We will not engage in the building, manning and operation of roll-on roll-off type of shipping. We will wait and see what happens. If it looks like working out. we may decide to go into this type of operation ourselves.” The Australian National Line has shown that it is a profitable type of operation and the Union Steam Ship Co. of New Zealand Ltd. is expanding into this type of specialised shipping.
I refer now to the problem of the bulk carriage of goods overseas. For instance, I refer to the bulk carriers to Japan of coal, bauxite and iron ore. Since these products are Australian, they should be carried from Australia in Australian built ships. After so many years, why is there no Australian shipping transporting superphosphate? This important commodity comes to Australia in overseas ships.
It is essential for the defence of any nation that it have an efficient merchant navy. The Government should strive to provide a strong, efficient and regular shipping service around Australia so that we do not become dependent on overseas operators for our trade in time of difficulty. For the reasons I have advanced, I sincerely ask the Minister to discuss with his colleague, the Minister for Shipping and Transport (Mr. Freeth) the placement of an early order for a vessel similar to the “ Princess of Tasmania “ to meet the known present requirements of industry in Tasmania. I also ask the Minister to examine the suggestion thai booking offices and agencies be established for the operations of the Australian National Line so that it will not need to pay commission on business which it obtains for itself, anyway.
.- The Senate is dealing with a bill entitled “A Bill for an Act to amend section 30 of the Australian Coastal Shipping Commission Act 1956-1964 and to amend that Act in relation to Decimal Currency”. Honorable senators will notice that the Parliamentary Draftsman has been permitted by tht Minister for Shipping and Transport (Mr. Freeth) to use the device of a restricted title to the Bill but apparently it is quite immaterial from the point of view of the ambit of speech making. This device is invoked only for the purpose of restricting amendments by the Senate in committee. I do not propose to say any more on that point except that if this device is employed persistently to restrict measures coming before the Parliament, I shall be proposing ere long that the Senate should change its Standing Orders so that it will not be foiled.
– Oh, no, you cannot change the Standing Orders.
– I hope that Senator Willesee will possess himself in patience. I suggest that the Standing Orders should be changed so that the Senate will not be foiled by this device of the Draftsman encouraged by the Minister. Having started off in this spirit of goodwill, I want to say calmly that having been deluged through the bilges with all this expertise on how to run a shipping line. I suggest that we as parliamentarians might be more expert upon the principles of parliamentary responsibility towards the finances of the people we are supposed to represent.
Various speakers have told us that there is an indisputable proposition that the national shipping line should be on a basis completely equal with private enterprise. Therefore, it is suggested, we should get rid of the provision in section 30 of the
Australian Coastal Shipping Commission Act which limits borrowing by the Australian Coastal Shipping Commission. This Commission is a public corporation in which we vested millions of pounds worth of public assets by act of Parliament when the Commission was constituted some 10 or 12 years ago. Now it is suggested that we as a Parliament should remove the one or two lines written into the Act preventing the Commission from mortgaging those assets to lenders in excess of £5 million and that this limit should be exceeded on the approval of the Minister and without the authority of the Parliament. Such is the vehemence, with which supporters of the Liberal Party Government promote Government undertakings in business that this proposal is seen as discrimination differentiating private enterprise from undertakings under public ownership.
Where does private enterprise get its capital? It gets it to the tune of millions of pounds but not by vote or act of Parliament. Where does private enterprise get its credit? It gets it not by guarantee of the Commonwealth Treasurer except in the one case in Australia that comes to mind and that is Ansett-A.N.A. In that case we have an extraordinarily artificial setup of a hybrid private-public ownership and all the mess that the aviation industry has got into in that connection so that the private enterprise section has had to be supported by a government guarantee.
But in the shipping industry, whoever owns the ships - and we are concerned only with the coastal trade at the moment - gets the capital required from the trading of past years and such credit as can be established on the market for an increment of capital. Such investors get their borrowing from ordinary financiers in the market and they pay the ordinary rate of interest. But through an amendment we passed in 1964, the Australian Coastal Shipping Commission enjoys the advantage of having access to the Commonwealth Treasury for direct loans from the Treasurer to it, not at market rates of interest but at the interest rate that the Treasury pays for long term bonds. Then the Commission has the advantage of enjoying Treasury guarantees. Therefore, its trading credit is only one of the factors that any lender to it would have to consider.
For my part, I am wholly unconvinced that Parliament is justified in principle or in this particular instance, in surrendering the provision under which there is parliamentary control of the upper limit of borrowing by this public corporation, the Australian Coastal Shipping Commission, so leaving its borrowing simply to the control of a Minister.
When I listen to speeches in the Senate I sometimes think that there would be some on the floor of the House who would transfer all public powers and authorities to be watched over only by a Minister. I say nothing in disparagement of Ministers as a class. They are the people who. by experience and ability, are in the front line of parliamentarians from the point of view of administration and responsibility. But they would be more than human if they claimed an intricate knowledge of many branches of their departments and they would be foolish indeed if they did not confess to a great dependence upon the bureaucracy which again I do not disparage.
I have great regard for some of the bureaucracy; but we know the growth of the virus and we know that bureaucracy has one direction whereas the ordinary individual, trader or entrepreneur has another. It is our job, representing as we do in the main the ordinary individual and trader, to see that bureaucracy does not arrogate to itself all authority and that Parliament, as representative of the people, does not denude itself of all authority so that the people are left simply to complete executive control.
This problem arose with regard to the nationalised industries in England when the Labour Government had a postwar penchant for putting all business undertakings under public ownership. This would have come into much greater debate as a matter of principle in Australia if the Liberal Party had not been able to expel the Labour Government from office in 1949. This brought under the supervision of a Liberal outlook whatever public ownership had been established in Australia. Of course, over the past 15 years this Liberal outlook has become somewhat faded and the blue is almost indistinguishable from the outworn pink of 1949. Now a Liberal Minister has brought in a bill to remove from the legislation by which the Australian Coastal Ship ping Commission was constituted the last form of parliamentary control over the borrowing of that organisation.
I regret the introduction of this legislation. I am not convinced about its wisdom, more particularly as we had before the Parliament as late as October 1964 this very provision relating to borrowing limitation. On that occasion we provided that the Commission could borrow moneys which the Minister certified as being necessary to meet the obligations of the Commission provided that it obtained the approval of the Treasurer. We also provided that the Treasurer, on behalf of the Commonwealth, might lend funds to the Commission, out of moneys appropriated by the Parliament, at a rate of interest not less than the rale of interest declared by the Treasurer to be the rate payable on long term bonds. Then we provided that the Commission might give security over the whole or any part of its assets for the repayment of amounts borrowed. That provision will still remain if this Bill is passed. We provided, too, that the Treasurer might guarantee the repayment of any funds borrowed. In addition, we provided that the amounts borrowed by the Commission and not repaid should not exceed at any one time the sum of £5 million, lt is that last provision the Parliament is now asked to remove from the legislation. No doubt the Parliament will remove it just for the asking.
When we were considering the legislation of October 1964, the Minister told us that that legislation would put the Australian Coastal Shipping Commission in a position parallel with that of the Australian National Airlines Commission, which operates TransAustralia Airlines. Those who seek the passage of this Bill should explain to us why the provision that total borrowings by T.A.A. at any one time shall not exceed £3 million is to be retained in the airways legislation. This is only one of the quirks of legislative experience.
The next observation I want to make relates to the speech that was made by the Minister when he advocated the passing of this Bill. A study of the second reading speech that was delivered when the 1964 legislation was introduced will reveal that reference was then made to the very same facts that have been mentioned on this occasion - that is, details of ship construction and the need to engage in long term charter contracts for cargoes. So the old second reading speech of October 1964 has just been rubbished up as a vehicle for bringing the current proposal before us. No reasons have been given in the Minister’s second reading speech on this occasion for removing the borrowing limitation of £5 million. The only outstanding borrowing shown as at 30th June 1965 was the bank overdraft of £2.1 million, which is very much below the ceiling. We have been able to undertake a creditable programme of ship construction without contravening that statutory limit, ft has been said that the Commission needs to have the limitation removed so that it may enter into long term chaner contracts for cargoes. Surely it is not to be thought that the Commission has to give security for the performance of long term contracts. lt has been stated that the Commission wants to be able to modify its capital structure. As 1 understand the position, the implication is that it has to pay a greater rate by way of dividend than the rate of interest it would have to pay on borrowed moneys. 1 could understand that being so in the case of a commercial venture that has had to buy its share capital. But the Commission was given its share capital and all it has to do is to provide for a dividend on that capital, the rate not to exceed 6 per cent. Where will it be able to borrow money at a rate better than 6 per cent, to enable it to enjoy the fruits of the loan market and diversification of capital? 1 think it was Senator Marriott who drew attention to this passage in the Minister’s second reading speech -
Whilst the Commission now has access to basically the same methods of financing as are available to private shipowners, its borrowing powers are limited and, if it is to carry through ils proposed capital works programme, it must have access to additional funds.
I ask the Minister to be good enough to indicate what the capital works programme is. I do not think that anybody would admit to a desire to keep information from the Parliament. If there is no such “ anybody “ then that programme ought to be staled to the nearest million pounds.
The next statement in the Minister’s speech to which Senator Marriott referred was this -
This is necessary, particularly if the Commission is to maintain a competitive position in relation to private shipowners, including overseas interests which may wish to enter into Australian coastal trading.
I am only a boy at heart, but my memory goes back to the time when the coastal shipping clauses in the Navigation Act were in the forefront of Tasmanian politics. The Navigation Act, which became operative after the First World War, effectively excluded intervention by any overseas vessel in the Australian coastal trade, which had particular incidence upon the trade of the island of Tasmania. In the interests of the Australian economy, we required that overseas ships which entered upon the coastal trade should pay Australian rates of wages. As I said, that legislation effectively prevented all overseas shipping interests from engaging in the Australian coastal trade. I think that provision has been in the Navigation Act ever since it was passed. According to my purblind understanding of the matter, the validity of this provision may have been open to some question, but it has never been questioned any more than has the provision in the banking legislation which requires banks to have a licence. It similarly is open to challenge as contravening the freedom of interstate trade that is assured by the Constitution. Section 92 of the Constitution assures to international shippers, as well as to interstate and intrastate shippers, freedom of interstate shipping. But the matter has never been challenged, and no interstate ship can enter into the coastal trade without a ministerial licence. I should like to know what is put forward when reference is made to the Commission’s being able to maintain a competitive position in relation to private shipowners, including overseas interests which may wish to enter into Australian coastal trading. I would think that the Parliament should require from this Commission a much more detailed revelation of the purpose it has in mind for the employment of the unlimited borrowing right that it seeks by this Bill to obtain. Today we heard reference, as we usually do whenever reference is made to shipping, to the fact that Australia should have its own shipping commission not merely for the coastal trade but also for overseas trade.
– Hear, hear!
– “ Hear, hear! “ says a senator from the Opposition. Since 1956, when the Australian Coastal Shipping Commission was set up, it has had undoubted power to use its assets for, amongst other things, a shipping service between a place in the Commonwealth and a place in another country. The item that Senator Devitt has just been pedling - he implied that the Commission is restricted in some way from using such agencies as it wishes for the procurement of business in ports - is entirely without foundation. Section 15 of the Australian Coastal Shipping Commission Act provides that the functions of the Commission are to establish, maintain and operate a shipping service for the carriage of passengers, goods and mail throughout Australia and, if it wishes, overseas.
– It was afraid to exercise the power. The last Australian overseas shipping line was sold up.
– Senator Cavanagh lives subject to a constant fear complex, but I think that Captain J. P. Williams diffuses constantly an aura of courage and dauntlessness. I do not think he is afraid to exercise any power. Indeed, he might at times go quite deliberately a little beyond power, and he has traded overseas, as my friend Senator Cormack reminds me. Having disposed of that matter for the purpose of debate with your indulgence, Mr. President, notwithstanding the limitation on discussion imposed in the preamble to the Bill, let me say that to hear the eulogies to this great Shipping Commission, one would think that it had conferred upon Tasmania great good fortune. As a matter of fact, it succeeded in establishing a monopoly of the passenger trade between the mainland and Tasmania, thereby removing from the Australian Government any obligation to continue a subsidy to maintain other services.
My information is that if the passenger rates charged on these steamers to Tasmania are compared with air fares it will be seen that they are only just a shilling or two under the air fares. Reading, the report of the Commission, one will see what a terrifically strong competitor road transport on the mainland is to the sea trade of this Commission. I am informed that the freight per ton mile from Tasmania to the mainland is just about 50 per cent, higher than the freight per ton mile from Melbourne to Sydney. So Tasmanians should not go down on their knees and treat this Commission as the new deity. It is using its very strong position which has been established by this legislation, and in 15 years it will be much stronger when it is able to eliminate more of the private enterprise lines. I just raise a mild voice of complaint at the passage of the Bill, but I realise it will be in vain.
Sitting suspended from 5.45 to 8 p.m.
– The purpose of the Bill which we are discussing at the moment is to amend the Australian Coastal Shipping Commission Act 1956-64 in order to meet the need of the Commission for greater borrowing powers and to give it greater flexibility within its capital structure. The Commission has functioned for a number of years, lt has been successful throughout its life. This afternoon I heard two or three honorable senators praise it for the services which it provides. But there comes a time in the life of every successful business when it is forced to consider its borrowing activities and its capital structure. Apparently the Commission has reached that point at the present time. I. imagine that it has been seeking from the Department of the Treasury and from the Minister for Shipping and Transport (Mr. Freeth) some relief from the tight grip in which it is held in respect of capital.
I have examined the Bill, but I still do not know how the Commission is to get its capital in the future. I imagine that, in the past the Government has raised loans on its behalf or that the Government has made grants to it from loan funds. The Commission has used those moneys to advantage. It not only operates a shipping service, but also constructs ships. Therefore, it must have money now and it must also have money at its disposal in the future. The Commission’s programme as outlined to me is a pretty good one. I should say that it is a major programme. The Commission proposes to build two vessels of 47,500 tons capacity, two roll-on roll-off cargo vessels, one Bass Strait passenger vessel - one of those vessels of which Tasmanians are very proud - and a new specialised vessel for the
Darwin trade. As lnc word “ specialised “ is used, J presume that the vessel will contain some form of refrigeration for holding perishable commodities en route from the eastern States to Darwin and the Northern Territory. Of course, that is a worthwhile programme. One is pleased to see that at least one undertaking of the Commonwealth Government is doing all right and that it has to expand its services.
Now let me have a look at the activities of the Commission. They are rather interesting. The accounts of the Commission, of course, are subject to audit by the AuditorGeneral. Everything has to be done punctiliously, so far as the accounts are concerned. First, the Department of the Treasury gets in touch with the Commission from time to time, and then the Auditor-General sends his inspectors in once a year to examine the accounts. The report of the Commission, as it is presented each year, is a good one. 1 find no fault with it. I turn to the results of the Commission, as they are shown in the report, for the year ended 30th June 1965. The cargo carried amounted to 6,919,316 tons. Considering the number of vessels that the Commission operates and the nature of the cargo carried - it carries iron ore to a certain extent - it has a good record. There were 102,177 passengers carried in the year. I know that Tasmanian senators would wish earnestly that that number could be doubled this year and next year. The revenue derived from operations amounted to £18,368,454. The net profit before taxation was £1,888,784. The income tax - and, of course, the Commonwealth Government is the only authority in the Commonwealth to which income tax is paid - amounted to £1,105,047 which was rather a tidy sum for the Commonwealth to accept from one of its own services. The net profit after taxation was £783,737. Of course, that dividend was paid to the Commonwealth Government. This is not a public or a private company, lt is a public service. It is owned by the public. So the Commonwealth Government received the income tax that was payable, and it also received the dividend.
Now, let us have a look at the percentage of net profit to capital after taxation had been paid. It was 4.6 per cent., which indicates that something is wrong with the capital structure of the Commission. Last year it was 6.3 per cent. The percentage of net profit to the capital is the real test of the profit making capacity of a company. Therefore, I propose to refer to the percentage in respect of other companies which are flourishing in the Commonwealth. The ratio of net profit to ordinary capital was 41.72 per cent, for Rothmans of Pall Mall (Aust.) Ltd., 17.3 per cent, for Woolworths (New Zealand) Ltd., 35.2 per cent, for Myer Emporium Ltd., and 35.42 per cent, for the Cascade Brewery in Hobart. So, judging by the net profit made by the companies to which I have referred, the Commission’s percentage of net profit in relation to capital is very small.
Now I really come to the gist of my speech. 1 want to know what is going to be done for the Commission. I know that the Government is amending the legislation. That is a simple procedure. But J would like the Government to tell me how it intends to improve the Commission’s capital position. How is the Government going to allow the Commission to raise the capital that it re-quires for its building programme? We have not been told that. I know that there are many ways in which it can be done. The Commission could issue unsecured notes and with Government backing that would be a good investment. The Commission could issue debentures which, again, would be a good investment, or the Commission could be permitted to borrow money and to create a variable interest rate - say, 1 per cent, or li per cent, more than the Commonwealth long term loan rate. If the Government were to do that, the Commission’s financial troubles would be over. The money could be borrowed. A rate of interest even 2 per cent, above the Commonwealth loan rate could be provided. I can assure honorable senators that all the capital required would be forthcoming immediately. Trustees holding funds would rush to invest. As this is a governmental authority - a commission - the Government could in a very simple way create power for it to raise all the capital it requires. However, the Minister’s second reading speech contains nothing in positive terms about how the Commission will raise its funds in the future. I should be happy if the Minister, when he is replying to the debate, would tell us clearly how the Commission will do so.
.- I approach my consideration of this Bill from a viewpoint which is slightly different from the viewpoints of certain of my colleagues. Unfortunately I was unable to hear the whole of the debate because I had an appointment which I had to keep, but I heard some of it and I interjected during the course of Senator O’Byrne’s speech. I will have some comments to make shortly in relation to that interjection.
Before dealing with that aspect, let me tell the Senate that prior to the Second World War Queensland was very fortunate in having a splendid coastal shipping service. It was possible for manufacturers in the southern States or in Brisbane to rely with absolute certainty on several well known ships which regularly every week conveyed cargo and, in many cases, passengers through to Cairns. As I have said, that was a flourishing trade until the Second World War. After the war the trade was not revived. There are various reasons for this, but I do not think this is either the time or the place to look into them. Suffice it to say that, as a result of the virtual death of shipping along the Queensland coast, the cost of goods, especially in relation to their transportation, has increased more steeply than it would otherwise hare done.
The present difficulty is gradually being relieved because of the greater activity of the Australian National Line, which is extending its operations to north Queensland. I welcome this extension and’ hope that it will continue. I am glad to see the evidence that this Bill presents to me that the interest in this matter is being increased. I have had occasion over the past two years to make contact with the Australian National Line, especially in relation to the smaller intermediate ports on the Queensland coastal strip. To a degree, the existing problems are being overcome and, as I have said, I believe we will continue to overcome them as long as the Australian National Line extends its services into north Queensland.
There is one feature of the Bill which I should like to mention. In his second reading speech the Minister for Customs and Excise (Senator Anderson) had this to say -
The Commission is requited to pay a reasonable return on its capital and is expected to play a competitive role in its operations.
I think that is quite fair, but 1 believe that a shipping service such as this should have within “its framework provision for a certain amount of developmental work and that this work should be separated from the general operations. This would provide for new services which probably would not be very lucrative in the first 1”2 months or so but which could be built up during a period. They would eventually become not only lucrative to the shipping line but also of great advantage to many people. Let me illustrate the point I am trying to make. The tableland of north Queensland - an area which is extremely fertile and which can produce in great abundance nearly all the primary produce one can imagine - is not as prosperous as it could be if it were possible to find greater consumer markets for its products. Produce from the Atherton Tableland has a relatively small consumer market, and it is a very costly business, because of freight costs, to attempt to tap markets further away. For this reason, there is a grave restriction on the amount of production in the area.
The position becomes most irritating when one realises that the very produce which, as I have said, can be grown in abundance is required in huge quantities in New Guinea. Whereas it takes approximately a day and a half for a cargo ship to travel from Cairns to the nearest ports in New Guinea, it takes three, four or five days for a cargo ship to travel from southern ports to the same area. Consequently, on the surface it would appear to be economic to ship from Cairns to New Guinea rather than from many of the southern ports, which, incidentally, have huge consumer markets of their own to cater for in addition to the relatively small, in relation to their production, markets of New Guinea. However, while these New Guinea markets are relatively small, as far as the southern producers are concerned, in comparison with their local consumer markets, they are very big in comparison with the consumer markets in the north. Unfortunately, it is virtually impossible for northern producers who wish to ship from Cairns to be certain that their goods will be taken to New Guinea, because the ships which ply to New Guinea do not call regularly, on an advance timetable, at Cairns. Nor is there any certainty of availability of loading space. The result is that the producers in the north cannot be certain that they can maintain a steady flow of goods to the markets to which I have referred.
I have had many discussions with various people in these northern areas in an effort to overcome this problem. One small shipping company in north Queensland has investigated this matter very thoroughly. The company believes that in the course of 12 or 18 months it would be possible to build up a trade between Cairns and New Guinea which would be economically sound from a shipping point of view, but naturally there are hazards associated with the early stages of such a trade. As far as I have been able to determine from the contactsI have made, it has been virtually impossible to get anyone to bear some of the losses which would be inevitable in the early stages of this undertaking.
– The honorable senator means establishment costs’.’
– Yes, the establishment costs of gaining the New Guinea trade itself in the first place.I admit that this is a fairly involved problem. Here is one way in which I believe our northern economy could be greatly helped; that is, if somehow we could get some assistance to establish the trade about whichI speak.
I have spoken to many people about this matter. So far, I have not got very far.I have spoken to producers and they are more than ready and more than willing to cooperate in giving a guarantee of a certain quantity of freight each fortnight or each month as the case may be. They have even gone as far as to make contact with some of the bigger merchants in New Guinea and have been assured that if they can guarantee a regular service of these products they will have an assured market. But, as I say, it is a market that will gradually grow.It will not be remunerative in the first 12 or 18 months. That is why I refer particularly to that section of the speech by the Minister for Customs and Excise where reference is made to a reasonable return on capital. Whilst 1 believe it is quite a reasonable thing to expect, I think some provision should be made whereby the Australian Coastal Shipping Commission can offset the losses that would occur in establishment costs of the service of whichI speak for a period of time.
This is a responsibility of our own national development. I think it would contribute very greatly to the economy of an area that we are always talking of wanting to help. 1 hope that, in the course of time, we will obtain some assistance in this regard. I have referred to the problem in the Senate before. I probably will do so again. ButI do most urgently ask the Minister for Customs and Excise to refer this matter to the Minister for Shipping and Transport (Mr. Freeth) so that he may have another look at it and see whether there is some way whereby this problem can be overcome, and the people of the north helped.
– Would it not be belter if the Australian National Line through the Australian Coastal Shipping Commission undertook the work and a subsidy was paid to the Commission in much the same way as certain airlines are subsidised on certain of their routes?
– The comment by Senator Kennelly has a very sound basis. As a matter of fact, there is a shipping line which operates to New Guinea from southern ports. It receives a subsidy.
-It is a privately owned line?
– That is true.
– The Government is looking after it, but wants its own national shipping line to be a philanthropic organisation.
– To a degree, Mr. Deputy President, the honorable senator and I are in agreement.
– Are we?
– I am delighted that the honorable senator agrees with me.
– We are in agreement in as far as both the honorable senator and I think that this service should be initiated.
– As long as the Government or somebody else pays, I do not mind.
– So long as it is established - that is my point. Having made that point, I wish to refer now to my interjection when Senator O’Byrne was speaking. I wish to make it abundantly clear that I know the honorable senator’s quotations were perfectly correct because he was quoting from the report of the Australian Coastal Shipping Commission with which we have been provided by the Department of Shipping and Transport. But the figures printed in the report are not as up to date as the figures which are available today.
Insofar as Evans Deakin & Co. Pty. Ltd. is concerned, it may be remembered that I said that this was a very flourishing concern and that it had developed considerably in the last 12 or 18 months. In fact, an expansion programme of some $2i million has been taking place at the Evans Deakin shipbuilding works in Brisbane over the past 18 months. The Queensland Government has contributed very heavily towards this expansion programme. Its contribution has been of the order of $1 million. As a result of this expansion programme, it is now possible for a ship to be launched not by the old skid method but by being floated out from the building dock. It might be interesting to honorable senators to know that Evans Deakin & Co. at the moment has a wonderfully attractive book of orders. The company has on its books sufficient orders to keep it fully occupied, even if it does not receive another order, until the end of 1967.
– How big a ship can the company build?
– I am not sure.
– Does the honorable senator know the last order Evans Deakin accepted? He should know the tonnage. His old mate Tom Hiley has just been appointed a director of Evans Deakin & Co.
– I realise that. But I have not been appointed a director. I am sure Senator Dittmer is sorry that he has not been appointed a director either.
– I would not accept the position.
– Well, I do not know the tonnage of the ship last ordered from Evans Deakin. I wish now to quote some figures relating to other orders which are currently on the books of Evans Deakin & Co. Ltd. There is an order for two Sea Roaders for the Australian National Line. These vessels are 420 feet in length and the value of the order is approximately Si 2 million. The first of these vessels will be delivered in two years and the second in two years and nine months. Another order is for a floating crane. This order, placed by the Melbourne Harbour Trust, is to the value of $2 million and is to be delivered approximately 18 months from now. Evans Deakin has an order for a dredger for a Sydney organisation. Its value is $3 million and it is due to be delivered in mid 1967. In addition, Evans Deakin has orders for several Naval patrol boats to be delivered in the next financial year. The company is building also a bulk carrier for Queensland Cement & Lime Co. Ltd. This is to be delivered in July of this year and its value is approximately $1 million. A bulk carrier is being completed at the present time also for the Adelaide Cement Co. Ltd. This will be delivered next month and its value is £H million. The facts I have quoted make up a pretty tidy order book. Evans Deakin is quite delighted-
– Who provided the money to improve the shipyards of Evans Deakin?
– As I explained to the Senate before Senator Dittmer came in to the chamber and started to interrupt, the Queensland Government has provided a great portion of this money. It has provided slightly over $1 million towards the construction of the improvement programme at Evans Deakin.
– It was £621,000.
– I repeat that the Queensland Government provided slightly over $1 million. This is what has been done since there has been a change of government in Queensland. I inform Senator Dittmer, through you, Mr. Deputy President, that the Queensland Government is doing this with a number of industries :n that State. It is because of the poilcy of the
Queensland Government today that Queensland is growing out o£ the lethargic attitude that existed during the reign of the previous Labour Government. However, Mr. Deputy President, 1 realise that 1 am being drawn away from the theme of my speech. One of the best things that ever happened to Queensland was that it had the benefit of the services of people able to indulge in a little bit of forward thinking in regard to many of these ventures. 1 gave those figures merely because, having interjected while Senator O’Byrne was speaking, I wanted to clarify the situation. 1 was not questioning his figures, but they were not up to date. It gives mc great pleasure to bring them up to date.
– in reply - As has been said during the debate, this is a very restricted Bill, the purposes of which are to amend section 30 of the Australian Coastal Shipping Commission Act by removing the restriction on borrowing by the Commission and, in the relevant provisions, to substitute dollars for pounds. However, with the indulgence of the Chair, the debate has covered a very wide field. It has covered the whole field of administration in regard to shipping and transport. Let me say quite frankly that, without having the necessary departmental advisers available to me, I am not competent to answer many of the queries raised, even if I had the will or the heart to do so.
– I am sure the Minister has the heart.
– I have the heart to do so, but because this is a restricted measure I should perhaps confine my remarks to it. However, with your indulgence, Mr. President, I will reply to a few of the points raised during the debate. Senator O’Byrne quoted from a document giving shipbuilding statistics as at 30th June 1965. As Senator Morris has shown, whilst Senator O’Byrne was quite accurate in his quotations from the document, the situation now is considerably different. Senator Morris was able to prove that Evans Deakin & Co. Pty. Ltd., to which Senator O’Byrne referred, now has orders considerably in excess of those which the honorable senator mentioned.
Although supporting the Bill on behalf of the Opposition, Senator O’Byrne said that the Government had” a phobia about selling Commonwealth assets. If I may retort in kind, the Opposition has a phobia about overseas shipping. Its advocacy in this matter is out of all proportion to the economics of it. But that was only a debating point. The honorable senator built his case around the sale of Government assets and the creation of an overseas shipping line for Australia.
I was more concerned with Senator Wright’s comments, and I think I should attempt to reply to the points he made. As I understood him, he said that the main purpose of the Bill is to remove the limitation of the amount that may be borrowed by the Commission, which is now fixed at £5 million or $10 million. The honorable senator said that the Bill would vest vast power in the Minister for Shipping and Transport, but in fact great power will be given to the Treasurer as well as to the Minister for Shipping and Transport, lt is not true, as suggested by Senator Wright, that parliamentary control over borrowing by the Commission will disappear if this Bill is passed. I think that is a negative approach. Speaking as a senator, not as a Minister, let me say that I do not accept the proposition that such parliamentary control will go. After all, in this matter it is competent for any honorable senator to use the normal forms of the House. He can raise the matter, for instance, when an annual report by the Department of Shipping and Transport is brought down. There is another more effective way. which 1 am sure will appeal to Senator Wright if he thinks about it. He is a tremendous worker when it comes to dealing with the Estimates. When the estimates for a department are presented to the Parliament any senator can ask probing and penetrating questions about them, and if the answers to his questions are not satisfactory to him he can subsequently move a substantive motion. 1 do not concede that if, for sound economic and business reasons, we remove the limitation on the amount that can be borrowed, the Parliament is abrogating its powers in this matter. What is being done is being done because it will make the Australian National Line a more effective, a more competent and a more capable organisation to serve the people of Australia.
Senators Marriott and Devitt referred to the procedures that the Commission adopts in the conduct of its business. I thought Senator Wright disposed of the point fairly well, but I think it is proper for me to say that, in my understanding, in accordance with the Australian Coastal Shipping Agreement Act all bookings and handling of freight cargo must be dealt with by the stevedoring and shipping companies. That is what I have been able to glean during the suspension of the sitting for dinner. So far as ordinary passenger bookings are concerned. I think this is, as Senator Wright indicated, a matter of business practice.
– The Governmenttied the Commission’s hands in respect of cargoes but not in respect of passengers.
– That is what I am saying. The Australian National Line may make any arrangements for the handling of passengers, and it chooses to do that through agencies because it considers that that is an economic proposition. Airline companies have been mentioned in the debate. One can make a booking with one airline through another airline, and in the same way it is competent to make a booking with one shipping company through another shipping company. That is something which operates throughout the whole system. In the case of passenger traffic, what happens is as a result of a decision by the Australian National Line.
– What did the Minister say in relation to cargoes?
– In relation to cargoes, it is my understanding that, in accordance with the Australian Coastal Shipping Agreement Act, freight cargoes are handled by stevedoring and shipping companies. That is the information given to me. I suggest that we leave the matter there.
This is a restricted Bill. Its purposeis confined to amending one section of the Act, and for that reason the debate is very circumscribed. However, I propose to bring to the attention of the Minister for Shipping and Transport (Mr. Freeth) some of the points that have been made tonight. It may well be that they will be raised in other debates, and it is proper that the Department should be aware of the views expressed on those matters by honorable senators.
The purpose of this Bill is simply to provide greater flexibility in the financial structure of the Commission. As we all know, there are tremendous advantages in being able to borrow for capital purposes. We all recognise as a simple business proposition the fact that borrowing for capital purposes is quite distinct from other types of borrowing. For instance, taxation becomes a factor in respect of borrowing for capital purposes because the interest paid is deductible for taxation purposes. Dividends would not be affected by the use of this type of financial arrangement.
Senator Benn said that the Bill does not show people how the Minister for Shipping and Transport, with the concurrence of the Treasurer, proposes to borrow the money. That is perfectly true. I suggest that no bill would do that. This Bill simply clears the way to enable the Commission to borrow beyond the limit that is imposed at present. This Bill imposes no limit; but I repeat that borrowing by the Commission can be controlled by the Parliament if it so chooses. It is not true to say, as Senator Wright said, that the Parliament, by giving its approval to this Bill, is giving the Ministry or the Executive an open cheque for unlimited borrowing by the Commission. I repeat that the Parliament has its redress or control. It is up to the Parliament to exercise that control if it has the will to do so.
Question resolved in the affirmative.
Bill read a second time.
.- I believe that it would be appropriate for the Committee to be informed of the substantial capital expenditures that will be made under the loan programme that the Australian Coastal Shipping Commission envisages implementing under this new head of power. I have heard suggestions about overseas shipping lines. Does the Commission intend to use this new borrowing authority for the purpose of any overseas shipping line? If not, what are the substantial capital expenditures in respect of which the Commission proposes to borrow over the next 12 months?
– 1 am not in a position to give the information that the honorable senator seeks. I have before me a whole mass of figures, but they would be completely meaningless if I read them out. The point that he raises is whether the additional borrowing power is intended to be used for an overseas shipping line. I say to him that the second reading speech makes clear the purpose or intention of the Australian Coastal Shipping Commission in relation to future needs. It is true, as he said, that the words that are used are the same as those that were used the last time the Australian Coastal Shipping Commission Act was before the Parliament.
I must rely on the second reading speech, which indicates the future programme. For instance, it is made perfectly clear that the Commission has already announced that it has under consideration a proposal to construct a second Bass Strait passenger vessel. It is elementary that, if the Commission has such a proposal under consideration - the Minister for Shipping and Transport (Mr. Freeth) has made it perfectly clear in a public statement that it has - the financial implications of that would- have been taken into account. The second reading speech also states that the Commission is committed to the construction of a second 47,500 deadweight tons bulk carrier and has ordered two roll-on roll-off “cargo vessels for the Melbourne-Brisbane and the MelbourneSydneynorth Queensland trades. I do not think it is competent for me, as the representative of another Minister, in the. Committee stage to get down to details of the Commission’s proposed programme in relation to the increased capital that it requires. I do not believe that it is competent for me to give such information in the form in which the honorable senator asks that it be given.
.- First, I thank the Minister for Customs and Excise (Senator Anderson) for throwing some light on one or two questions that I raised in my speech at the second reading stage. He certainly clarified the position to a degree. However, I am not entirety happy that the present situation in respect of the booking of freight is in the best interests of the Australian National Line. I should like the Minister, if possible, to give more specific reasons why the Line has to depend on an opposition company for the booking of its cargo. I pointed out in my speech at the second reading stage that cargo is the dominant feature of the Australian National Line’s Tasmanian trade, and that its ships could operate economically on cargo alone, without carrying any passengers at all. So the booking of cargo is a pretty important part of the Line’s operation of its Tasmanian service. I do not know what the Line thinks about this matter. 1 do not know whether it was consulted on it or whether it is happy with the present situation. If we are to give it autonomy as a freight carrying organisation, as we should, it should have a say on whether it or an opposition company does the booking of its freight cargoes. That is the first matter.
The second is that we in Tasmania are particularly concerned about the provision of an additional ship similar to the “ Princess of Tasmania “. We are anxiously waiting for the Government’s decision to go ahead with the provision of such a ship. I do not want to write down the importance of this, because it has many features which are important to the Tasmanian economy. I would very much like the Government to make a statement that a decision has been made. Such a statement has not yet been given to us. This may be purely woolly thinking on the part of somebody; but I understand that a consortium of private shipping companies has considered the possibility of building a ship similar to the “ Princess of Tasmania “ for the Tasmanian run. I believe that we are entitled to know about this matter at this stage.
Time is running on. The trade is increasing. At the moment the ships are unable to shift all the cargo that is offering. I can recall that recently six ships were loading cargo at Devonport during one week, but at the end of the week cargo was still left on the wharf. Honorable senators will understand that industries are suffering as a result of the inadequate supply of ships. We in Tasmania are so dependent on sea transport that we would very much like to hear the Government tell the people that it intends - if in fact it does - to .proceed at an early date with the letting of a contract for the provision of an additional ship similar to the “ Princess of Tasmania “.
– Of course, we are now offending against Standing Orders. I cannot add much to what I have already said, beyond saying to Senator Devitt that at the time of the drawing up of the Agreement in 1956 consideration was given to the very matters that the honorable senator has raised. As to the construction of a second Bass Strait cargo vessel, the Minister has the matter under consideration. I shall draw the Minister’s attention to the case that has been made today by Senator Devitt and other honorable, senators for the urgent speeding up of consideration of the construction of such a vessel.
.- When the Minister referred to the Australian Coastal Shipping Agreement I sent for a copy of the Australian Coastal Shipping Commission Act. Section 8 of the Agreement provides -
The Commission will not, except as provided in this agreement, engage in stevedoring operations in connection with the coastal and territorial shipping services, or undertake the booking or handling of cargo carried in ils vessels in the coastal and territorial shipping services.
The Agreement contains various sections which spin out the qualifications of that provision. Notwithstanding the section I have quoted, we have noticed in the last twelve months that the Australian Coastal Shipping Commission has found itself capable of devising an entirely novel approach to stevedoring operations when engaging waterside workers in Tasmania to work on roll-on roll-off vessels. In addition to providing regular employment for waterside workers, the Commission provides a rake off for the union. The rake off is that the union receives 1.0 per cent, because of the fact that its members are employed at certain rates. This is an entirely novel approach on the part of unionism to the employment of labour.
– I am grateful to Senator Wright for pinpointing the relevant section of the Agreement. I wish to make it clear that, contrary to what has been said in this debate, companies in opposition to the Australian National Line do not handle the Line’s business. About 50 companies are parties to the Australian Coastal Shipping Agreement. They undertake stevedoring work for the A.N.L. without involving the Line’s direct competitors. I do not want to be pinned down to this in the absolute, but the position is not quite as bad as Senator Devitt was endeavouring to make it out to be.
Bill agreed to.
Bill reported without amendment; Report adopted.
Bill (on motion by Senator Anderson) read a third time.
Debate resumed from 16th March (vide page 56), on motion by Senator Anderson -
That the Senate take note of the following paper -
Softwood Planting ‘ in Australia - Ministerial Statement, 16th March 1966.
Senator KENNELLY (Victoria) 1.8.54].- We are now discussing a statement made by the Minister for Customs and Excise (Senator Anderson) on a matter which is very important to the Australian timber industry. The Minister’s statement announces that agreement has been arrived at between the Commonwealth and the States in respect of softwood planting for the next 35 years. The Minister also states that the Government set up the Australian Forestry Council which has under it a standing committee consisting of the Director-General of the Forestry and Timber Bureau, the head of each of the State forestry services and the chief of the Division of Forest Products, Commonwealth Scientific and Industrial Research Organisation. An agreement has been adopted by the Commonwealth and the States and it will be the basis of softwood planting in Australia for the next 35 years.
The situation in regard to the supply of softwoods is clearly summed up in the Minister’s statement. It is not my intention to repeat the Minister’s statement, but I think it would be of great interest to the people to have picked out what one might call its highlights. The Minister stated that we import timber and timber products to the annual value of about $200 million. We have an area of approximately 30 million acres in use as productive forests. Of course, most of that area is devoted to hardwood forests, which provide excellent timber but which is, of course, harder to work than softwoods, lt is a matter of opinion whether the life of hardwood timber is as long as that of some of the imported softwoods, particularly Oregon pine that is used rather extensively in the building industry in this country. In addition, we have about 700,000 acres of softwood plantations, of which about 500,000 acres are owned by the States and the balance of about 200,000 acres are privately owned.
Our present demand for timber and forest products is about 500 million cubic feet a year, only about two thirds of which is produced locally. By 1975 our consumption will rise to 670 million cubic feet annually. After 35 years, when the scheme ends, Australia’s consumption will be about 1,100 million cubic feet annually. One can say honestly that the Australian Forestry Council has done a very good job of planning ahead. I always get a bit nervous about mentioning planning in this House but even the Government, in submitting this very important and practical scheme, at last has had to admit that it must get down to something like a plan.
– I admit that the honorable senator knows something about timber and I will be interested to hear what he has to say about this proposal but I am intrigued that this Government has produced a plan - in this case to secure supplies of softwood timber for Australia. I have no objection to such a plan. I hope it succeeds. ] also hope that when in the future we have an even wider plan to encompass the national economy, we will not be met, as we have in the past, with the cry: “ All you think about are plans. What have the planners ever done?” In that context it is most pleasing to me to see a plan before us.
Our current forestry programmes will yield less than 500 million cubic feet of softwoods in 1975. According to the statement, if we do not adopt the plan, our local production will amount to only 700 million cubic feet by the year 2000 whereas our consumption will be 1,100 million cubic feet. As Senator Webster has said, we have to plant the trees. If we do not, we can. imagine the effect on the balance of payments because of the importation of timber.
Because of scientific advances more iron, concrete and steel are used in buildings but a considerable quantity of timber is still used in the construction of the average home. It is true as the Minister has said that forestry is primarily a matter for the States. Despite a limitation on the funds at their disposal, some States have played an important part in the production of timber. South Australia, in particular of the main,land States, has done outstanding work in reafforestation. Probably it has done more even than my own State although pine forests are scattered, throughout the length and breadth of Victoria.
This statement is important because timber is such a valuable commodity in a. national sense. No Commonwealth Government can remain indifferent to what the States are doing in afforestation. The financial aspect is also important to the Commonwealth Government. The only authority that can embark on schemes on this scale, whether they are concerned with timber or any other product, is the Commonwealth Government. No progress can be made unless the national government enters into the field because only the Government at Canberra can met the financial requirements.
Following conferences between the States and a number of Commonwealth instrumentalities, some of which I have mentioned, this plan was laid down and an estimate was made of the nation’s timber requirements as far ahead as the year 2000. lt was thought that Australia’s timber needs could be met in the long term if about three million acres of softwood plantations existed in the year 2000. To achieve this target it was decided that the rate of planting should be increased from 40,000 acres a year to 75,000 acres a year over the next 35 years. The Australian Forestry Council estimates that more than four million acres could be made available for softwood planting without encroaching on the area that is now used for hardwood forests.
It then became a problem of how the necessary additional plantings should be encouraged. The Council estimated that private individuals would plant about .10,000 acres a year and the remainder of the proposed area would be planted by the various State Governments as well as, no doubt, by the Commonwealth Government itself. At present the various Governments are planting about 30,000 acres a year. Finance was needed for the additional 35,000 acres required so that Australia could be made more or less self-sufficient. The Council estimated that Australia could become self-sufficient by the year 2000.
This is a scheme that requires a large sum of money. The Commonwealth Government has submitted a proposal under which it has offered long term loans free of interest and even without the repayment of principal for the first 10 years, lt was known that there would be no return from this industry for quite a number of years. It is to the credit of the Australian Forestry Council that it recognised that the moneys that would have to be spent on this scheme would have to bc made available interest free, even over a number of years, and that no repayments of principal could be expected until there had been some return from the timber grown.
The Commonwealth Government has agreed to allocate a sum of $20 million which will be advanced over a period of five years. At the end of that period the Australian Forestry Council will consider the further financing of the scheme. When one notes that we are spending $200 million a year on the importation of timber, one realises just how much we would have to spend on timber as this country grows unless a progressive scheme for the growing of timber in Australia were implemented. I compliment the Government upon the statement that has been made. I compliment the members of the Australian Forestry Council for taking a long view. A scheme of the kind envisaged has been needed. That scheme will serve the interests of this nation and will be a source of satisfaction to governments that succeed the present Government when they find that they are not’ confronted with a balance of payments problem much greater than the sum of $200 million which is now being paid annually to import timber.
– Like Senator Kennelly, I compliment the Government upon its action. I commend the scheme to all honor able senators. Essentially it is proposed to spend $20 million over a five year period as Commonwealth aid to the development of our forestry resources. The proposal really flows from the work of the Australian Forestry Council, which is a two tier structure of much the same pattern as that of the Australian Agricultural Council. This device for the development or augmentation of Australia’s resources, in which both the Commonwealth and the States share responsibility, is a good one. I suggest that such a device has not failed to attract some interest in the past and will not fail to attract interest in the future. In Australia there are many areas where Commonwealth and State co-operation must be achieved if we are to have proper utilisation and development of resources. Forestry is a case in point.
The Australian Forestry Council was conceived on the same principle as the Australian Agricultural Council. The Minister for National Development, who is the Minister in charge of Commonwealth forestry activities, is chairman of the Council. He sits with six State Ministers, each of whom is in charge of forestry activities in his own State. They comprise, in effect, a political group which makes decisions at the broad political level. The Ministers are advised by the Standing Committee of the Council, which is similar to the Standing Committee of the Australian Agricultural Council. The Standing Committee consists of the Director-General of the Commonwealth Forestry and Timber Bureau, who is the chairman, and the chairman of each of the State Forestry Commissions. So we have a very good blend of the best technical advice available to recommend policy and general broad principles to the political group. That group in turn makes its recommendations to the Cabinet which in turn makes a recommendation to the Government. Then the Government submits a recommendation to the Parliament. I suggest that this is a very sensible way indeed in which to handle the resources of a country like Australia. We ought to be examining the future development of resources management generally on the same general basis as that on which the Australian Forestry Council was brought into being.
The Council fundamentally is charged with a number of things. First, it is charged with the management of the Australian forest estate - the one that God put here for us - and then with adding to our forestry resources to cover the deficiency that is known to exist. The Australian forest estate consists of the natural eucalypt hardwood forests which have been in existence for a very long time and which in many cases have been very badly managed and neglected, cut over, burnt and’ generally downtrodden, and also the plantations of softwood, which have become a feature of Australian forestry activities over the last 20 years. The creation of the Australian Forestry Council, as a result of the work of which it is proposed that the Commonwealth should join with the States in providing resources to fulfil’ our forestry programme, has been of very great assistance to those who are responsible for our forests and to the industries that work in wood. We are really witnessing a great new takeoff for Australian forestry activity and Australian industries that are based on wood utilisation. That is how Australian foresters, both Commonwealth and State, feel about the matter. This is something they have waited for but which many believed would never come to pass.
I propose to make an interesting quotation from the first forestry text book that was written. The book, which is entitled “ Sylva “ and which was written by John Evelyn, was first published in 1665. I propose to quote from this publication because it bears on the forestry problem that exists today just as it did on the problem that existed in those early years.
– Is it from the title of that book that we have the word “ silviculture “?
– That is correct. This is the quotation -
First it will be requisite to agree upon the species: as what trees are likely to ‘be of greatest use, and the fittest to be cultivated and then to consider how planting may be best effected.
That is the problem that confronts us in Australia even today. The Australian native forests consist principally of eucalypts and some brushwoods. They cover a total area of 30 million acres. Of this area only 700,000 acres carry softwoods. An interesting feature of the softwood’ forests is that they have a very much greater productivity than the hardwood forests. It is im portant to -recognise that fact. Many Australians believe that we ought to do more about our hardwood forests and they wonder why money is being spent on softwoods. They ask: “ Why don’t we look after our hardwood forests better? If we did so we would be able to produce the timber we require.” It is natural to think like that, but such an attitude is not really based on solid substance and economic fact.
In 1963-64 one-eighth of the total Australian consumption of wood, which amounted to 400 mill ibn cubic feet, was provided by our plantations - our man made forests. It is estimated that in the year 2000 three-fifths of a total consumption of 880 million cubic feet will be provided by the plantations. Those plantations will then account for no more than oneeleventh of the Australian forest estate. Unfortunately, the Australian hardwood forest is not a very economic proposition It is a very economic forest to look after, because it was put there for nothing, but it is not an economic forest to grow. There are certain other problems connected with Australian hardwood forests. Many communities base their livelihood on the production of sawn timber from Australian native hardwood forests. In the year 2000 many of these will be deficient in raw material. An estimate of the long term value of production of saw logs for this purpose is that in 1965 - this year - 248 million cubic feet is available and that in the year 2000 only 190 million cubic feet will be available. There is a change of pattern in timber usage through the years. Some industries will probably diminish and others will flourish. This, unfortunately, cannot be helped, but evidence is available today to predict the pattern of development so that nobody will be .put in a situation of distress as long as thinking is done well enough ahead.
It has been stated by Senator Kennelly - and it is a good statement - that the Australian timber import bill today is $200 million. That is about the figure. Australia grows softwood for a couple of very sensible reasons. First, the tree grows here remarkably well. The principal softwood tree in Australia is the pinus radiata which is, after all, a tree whose homeland is the Monterey Peninsula of California. In Australia it grows a great deal better than it grows in its homeland. Indeed, it grows better here than it grows in any other part of the world, I think. A typical growth of pinus radiata in Australia will reach about 4 inch diameter in II or 12 years. Sometimes it reaches this size even in 5 or 6 years. This sort of diameter classification is not reached in Scandinavia for 30 or 40 years. So we arc growing these softwoods ten times faster than they are grown in Scandinavia and, 1 think, twice as fast as they are grown in California. This allows us to produce a forest economically, quickly and efficiently with softwoods when we could not do it with other species.
The economics of pinus planting are specialised. I shall deal with them briefly. In softwood plantations we are dealing with the operation of growing a crop. We are talking about growing wood. Wood in softwood plantations is a crop of ieng rotation. Techniques must be especially adjusted for this. We have to learn how to protect the trees. A simple programme is something like this: The planters try to get the cheapest land they can get, preferably Crown land, as long as it is suitable. They assess its qualities for pine planting at various levels of efficiency. These are called site qualities and they range from a site quality of 1 to a site quality of 5. The planters try to get close to market. They get the land cleared as quickly and cheaply as possible. As a rule, they burn it in winter time and the following winter they plant all the trees as little seedlings straight into the earth in groups of eight by eight or nine by nine. The forest is protected from rabbits. As a rule, the survival rate is about 90 per cent, of the trees and at about 7 or 8 years the foresters begin to prune the trees. They take off the lower branches in order to induce the trees to grow upwards. At the end of II, 12 or 15 years they take out every second tree and every defective tree and they prune again. The purpose of all this work is to try to force the trees upwards, to limit the number of branches and thus to limit the number of knots. Essentially the idea is to produce the greatest volume of usable wood to the acre. The forest cycle runs out at about 40 years, with the first income coming at between 12 and 15 years.
Under this new programme, Australia will have a planting rate of 75,000 acres of softwood per annum, as against a current planting rate of 40,000 acres. The average capitalisation of the forest when finished will be about $800 an acre. On the full capitalisation of the forest, nearly threequarters of the investment is interest. Private forestry will make its contribution in the order of about 10,000 acres per annum.
Demand figures have been given by most other speakers but I shall give the world figures, which are o* some importance. These are taken from the report of a symposium of the Food and Agriculture Organisation on man made forests. The present value of production from the world’s forests is estimated by F.A.O. to be of the order of $US45 billion annually. The annua] value of production by the turn of the century is expected to exceed $US100 billion. The present value of consumption of forest products in Australia is of the order of SA600 million, and this is likely to double by the year 2000. This is an important point, because it is not only Australia’s problem; it is a world problem. The production of the additional wood needed by world industry by the year 2000 will depend to a great extent on the success achieved by man himself in (he establishment of new forests and on careful rehabilitation of old forests.
That is where we depend so much on the Forestry Council and so much on the people who comprise the professional foresters of Australia, because these are the hard core of trained people who know how to grow forests and manage them. They will be as important in the end as the money. In the end, the factor that may limit the forestry programme in Australia, if we are not very careful, is the shortage of skilled technical men, because this is a skilled, technical profession. Fortunately, we have begun to train foresters at a higher rate over the last four or five years, but it is possible that we may find a stretching of our technical abilities in the early four or five years.
I believe that what we ought to do in this country, having reached this point of planting forests to a stage of economic self sufficiency, is to look closely at whether we could not afford, in a wood hungry world, to plant timber with some idea in mind that it might be a good export staple later on. I think that there is a case for examining this. I suggest that the Forestry Council will probably do this when its self sufficiency plans are well advanced. I think that Australia is in a peculiarly fortunate position to do something about planting wood for export in time. We have about 1 million acres of land available for this purpose over and above the needs of the present programme, and this could be looked at.
There are some very interesting figures that I was able to have taken out on what these wood additions mean. I have used these words specifically. When fully established, the Commonwealth sponsored additions alone will add 240 million cubic feet of logs annually to our wood supplies. Before the war, it took more than 4 cubic feet of logs to produce $1 at the factory door. Today .84 cubic feet of logs pro- duces $1 at the factory door. This means that wood as a raw material at factory doors is now worth five times what it was pre war. That, to mc, indicates that we ought to be thinking about what is going to happen later on with wood prices and wood supplies, and whether or not there is a case for Australia to do something beyond its own self sufficiency requirements. The value of these Commonwealth sponsored wood additions will, if wood prices improve no more - this is most unlikely in a world of growing shortage, and they will probably go much higher - be $280 million annually to the economy.
I think it is fair also to make the point that the Commonwealth proposal is one to provide $20 million annually for five years to start the programme. It will be clear to us all that more money will have to be provided beyond that five years. The suggestion is that the money be interest free and repayment free for the first ten years. Those honorable senators who have studied this matter know, I imagine, that foresters believe that ten years is not nearly long enough, that the period ought to be 15 years. Essentially, that is fair comment. There is no revenue from the forests until after about 13 years. The States which are involved in this programme will have to find a lot of money in addition to this. The point made by the foresters and the States is that 1 5 years would be a fair time at which to begin repayment of interest and principal. I think we can all be fairly sure that if the Commonwealth insists on ten years the
States will not knock the money back; nevertheless, they have a fair argument for a 15 years term in place of a ten years term.
It is equally fair to say that a ten years term, interest and repayment free, represents, in effect, a grant by the Commonwealth of approximately 35 per cent, of the total investment. If this term is extended to 15-years, the Commonwealth grant equals half the investment. The real point at issue is that the States are being asked to repay the loan and interest before any revenue comes in, and that is worth examining. Repayment of the loans could well be set, I imagine, at 40 years. It has not been specifically stated anywhere, but the suggestion has been made that the period will be 25 or 30 years. A case exists for a 40 year loan term because the forest cycle is a 40 year cycle. It is 40 years from the time of planting, through all the various stages until everything is taken from the forests and the total returns are achieved. A sensible case exists for a loan term of 40 years. As far as I can judge - and it is not easy to get exact figures on this point - the break even point in a forest is reached at about 35 years. Therefore, these people are involved in a long operation. It is not until a period of 35 years has elapsed that the money which is outlaid is recouped. The last five years is the period when profits may accrue to those who have invested the money - in this case, the Australian people.
One could also, I think, make the point that the employment capacity of these forests is a very important matter. When this programme is completed and we have three million acres of softwood forests, 100,000 people will be employed on work in the forests and the associated industries. This will apply substantially to the country areas of Australia, lt will be a sensible use of our land and resources and a sensible atd to decentralisation. In the early years of this programme, that is towards the year 2000, a great part of the wood available will be pulpwood suitable for making particle board, paper and newsprint. It has to be remembered that in the early stages of this scheme, large industries in the country may convert to the first stages of pulpwood production.
One could also say - and this has never been brought out perhaps as well as it might have been - that in a country like Australia which is so poorly watered and where the total water flow of all the rivers is equal to half the flow of the Mississippi River, we have to consider very carefully our river systems and their catchment areas. These forests will be substantially planted in the high country where all the rivers originate. They will provide very valuable protection for the catchment areas. The forests are often planted on land that one would not want to farm extensively. They are often planted in country that would not be otherwise used. They protect the water shed from erosion. They do something for the Australian people far beyond providing timber. They provide cover for the water supply, which is probably the most vulnerable thing in this country. I think that if one looks at Australia as a country and asks: “ What are the limiting factors?”, one finds that water has always been the first limiting factor and that forestry has always been next. The forestry factor is being substantially overcome, but water will always be one of the great limiting factors in Australia. Anything that helps to conserve water and protect Australian soil is something which we ought to support. 1 commend the proposal very strongly. J say to all honorable senators that I think that the Australian people will one day have cause to remember this year as being a noteworthy year. They will recall the actions of the Ministers and the Governments, both State and Commonwealth, and the actions of the Parliaments, both State and Commonwealth, who brought this proposal forward, who espoused it and who saw it come to finality. The people will regard these as actions of a statesmanlike character. I commend the proposal.
– The South Australian Government welcomes the proposal. I am not speaking for the Government, but I know that its Ministers have expressed satisfaction at the Commonwealth’s intention. This is the first occasion on which the South Australian Government has become a party to a scheme of this type because previously the softwood forests and the machinery producing section of the industry have been selfcontained. In the past they have been very well dove-tailed into the State’s housing programme. This is the first occasion on which South Australia has been in a position to make a suggestion. The Minister of Agriculture and of Forests, Mr. Bywaters, at the conference in New Guinea suggested that some scheme might apply in relation to moneys with which to purchase land. I am pleased to note from the statement on this matter that an appropriation will be provided for this purpose.
I know, as 1 think other honorable senators have mentioned, that South Australia made a suggestion - and I understand that the Australian Forestry Council proposes to adopt it - that the period of the interest, free loan should extend from 10 to 15 years. I trust that before these matters are cemented, this scheme will be considered. In 1908, the Gunn Government, which was a State Labour Government, passed legislation which provided for the establishment of our forests. The first plantings took place in about 1912. Since that time, this industry has become a very profitable and well managed one, particularly in the south-east area of South Australia. Not only is this a good thing from the point of view of the economy - as I have mentioned, many of the products flow directly into our housing programme - but in addition it is of great importance in decentralisation. There are improved communities in the forest areas, such as Mount Gambier, Tarpeena and Nangwarry. There is the Wirrabara forest in the north, and there are smaller forests at Port Lincoln. These forests add a great deal to the development of the industries and the communities in those areas. So not only do we have profitable industries in these areas, but we also have community groups which rely almost entirely upon the forestry industry.
It might be worthwhile to slate that along with this great venture of planting forests, in South Australia we have developed a very satisfactory Woods and Forests Department, which has made sure that the mechanical processes in relation to forests have been approved. I am pleased to say that I have visited many mills in South Australia. Not only do they have up to dale machinery, but they are expertly managed. The management, both locally and at the central organisation, keeps up to date with the trends in the industry. Senator Kennelly and Senator Cotton said that we in Australia spend some $200 million a year on the importation of timber. We should not be in this situation. To some extent, this drain on the economy, particularly in my own State, has been offset by the great publicity in respect of the use of pinus board.
I am pleased to not that South Australia has been able to match many of the imported boards and the pressed boards which are manufactured in other places. They are used for floors and linings. By various mechanical devices, the timber mills have processed and planed these boards to the stage where they are not only attractive but also cheaper than imported boards. I can visualise the situation where our industries in South Australia will venture into other processes which probably will put off the market some of the boards which are coming from other places. This is a good thing because, as I have mentioned, in my State we have towns such as Mount Gambier which rely greatly on the forestry industry. The Woods and Forests Department is the greatest employer of labour in this area. Consequently, we have a great labour pool. We have a demand for housing. We have a planning authority in the community. We have a source of employment for the people.
Recently, on the negotiation of the New Zealand-Australia Free Trade Agreement’, some people in this area were concerned that the softwood industry might be jeopardised because of the Agreement. But I think that the scheme we ure discussing is going to help the South Australian Government. Th«. Minister of Agriculture and of Forests in South Australia has stated that he welcomes this proposal as South Australia is encompassed by the scheme. As I have said, it was he who suggested that consideration might he given to advances being made to acquire land. In my State land for this purpose is becoming increasingly difficult to obtain. The Government probably would be prevented from obtaining such land were it not for this proposal. As a result of the proposal, the South Australian Government recently purchased 300 acres of land at Cudlee Creek, and it proposes to purchase other land at Mount Gambier and also in the Adelaide hills, which would be suitable.
These are points which have to be noted. A State such as ours which depends upon the softwood industry, particularly in the country districts, welcomes the proposal. We hold one quarter of the acreage for these purposes.
At this stage let me mention - I hope this will be noted - that when I tried to obtain the latest reports in relation to this matter from the Library I was told that these were not available. 1 do not blame the Library for this. The latest report from the Forestry and Timber Bureau - that for the year ended 31 st December 1964 - was not available. The only one I was able to obtain was the report for the year ended December 1962. I could not obtain a copy of the “ Timber Supply Review “, which is published by the Department of National Development, later than that for June 1964. This is a very important publication if one wishes to learn the overall production and the value of imports. 1 hope that in future the latest copies of these reports and publications will be available so that the true story can be translated into figures.
As the 1962 report of the Forestry and Timber Bureau is the latest that I have been able to obtain, I shall cite some of the figures contained in it. Page 48 of the report relates to the areas of plantations as at 30th September 1962. Dealing first with private holdings, we notice that in New South Wales there is a total of 12,500 acres privately held, in Victoria 67,600 acres, in Queensland 6,720 acres and in South Australia 37,444 acres. Government holdings in New South Wales total 92,955 acres, in Victoria 55,019 acres, in Queensland 99,037 acres and in South Australia 1 16,640 acres. The total of government and private holdings in New South Wales is 105,455 acres, in Victoria 122,619 acres, in Queensland 105,757 acres and in South Australia 154,084 acres.
Having noticed the development in South Australia and having read the comments of Mr. Bywaters, the South Australian Minister, who was reported earlier as having said that the Government probably would be introducing legislation in relation to this matter, I would like to say I would welcome what has been done. I am confident that the South Australian Government will use the funds to be made available to ensure that there will be continuing development of the areas in question. 1 hope that ultimately this will tend to reduce the large import bill that we now have. I notice that the Minister, in his speech, said that we might envisage a situation in which our import bill would be reduced by as much as S600 million by the end of the century.
– I rise to speak rather briefly on the matter of softwood planting in Australia. I compliment the speakers who have preceded me in the debate, particularly Senator Kennelly and Senator Cotton, for the rather deep and comprehensive approach they made to the discussion of this paper. I should like to add some facts and figures which have not been mentioned already, but before doing so let me examine the role of the Commonwealth as I see it. The Commonwealth has interested itself over the last 40 years in the provision of higher education in forestry. The Australian Forestry School was established with its headquarters at Yarralumla, here in Canberra, and within the last year or so the Australian National University has taken over a large portion of the teaching and practical work formerly done by the Forestry School.
I would say that all the foresters in Australia, other than those who are migrants, have spent several years of their courses in Canberra. The Forestry School here has a world wide reputation. I understand it attracts students from all over the world. I was interested to learn that there were students from Abyssinia, Israel, the United States, some countries of South America and Teheran in Persia. Australia’s reputation is high because of its expertise in forestry education. It is appropriate, therefore, that, as a Commonwealth- so well advanced in forestry education, we should do something to fill the gap of $200 million a year, which is the value of the difference between our requirements and our production. 1 am very glad that there has been cooperation between the Commonwealth and the States. Each State has a magnificently managed Forestry Department. It has been my privilege to move among foresters in States other than my own. I know the foresters in South Australia very well. I should like to say how. keen are the forestry men in Tasmania and Victoria, where I had occasion to discuss matters of great interest such as the activities of the sirexwasp, which occupied our minds three years ago when the outbreak was discovered in Victoria. In the States are forestry men who have been trained partly in Canberra and partly in their own State universities. These men are right on top of the job. Having regard to the expertise of the Commonwealth foresters in Canberra and of the -foresters in the States, I think that the plan envisaged in the Minister’s statement has a very good chance of success.
– Did not the States complain that the allocation was not enough?
– The States, of course, would indicate that it was not enough but I think the discussions were more the question of repayment. They wanted a longer time for repayment of the loan and a longer period of freedom from interest payments. I do not think the States have complained that the proposed allocations have not been enough. I think they are very grateful that a start has been made but, understandably, they say that the time for repayment should be 40 years rather than 30 or 35 years, and that 15 years should be the interest free period rather than 10 years. I can understand both of these points because, as Senator Cotton pointed out, the normal life of a softwood tree which is to be milled is about 40 years. Senator Cotton’s second point was that about 15 years elapses before there is any monetary return from thinning. However, we can assume at present that the States are grateful for the amount which has been offered. They realise, of course, that they will have to buy land and that this will have to be serviced by their existing departments. Possibly at this time they are not so much concerned about obtaining a larger amount as they are about the terms of repayment and the interest free period.
It is agreed on all sides that a larger planting programme is desirable. In this connection, I was most interested to read in the “ Forest Resources Newsletter “ No. 1 of 1965 of some ideas that the Australian Forestry Council has put forward with regard to planting. Senator Cotton made reference to the functions of the Council and the standing committees of that body. The Australian Forestry Council consists of the Minister for National Development (Mr. Fairbairn), the Minister for Territories (Mr. Barnes) and the Minister for Forests in each State. The Forest Resources Newsletter points out that’, at the first meeting, the Council considered possible incentives to encourage forestry on private farmlands, lt is on that subject that I propose to offer some views to the Senate.
For 21 years, 1 lived in the city of Mount Gambier, described by Senator Bishop as the great forestry centre of South Australia. I agree with everything that Senator Bishop has said with regard to the importance of forestry in connection with decentralisation. The number of people who earn their livings through being actually engaged in forestry or in industries ancillary to forestry is absolutely amazing. 1 refer to the men who plant the trees; the men who thin those trees; the men who cut those trees down; and the men who service the trucks which go into a forest area and haul out the logs. In addition, there are the people who take care of the men who service the trucks. So it goes on. In South Australia there are large forestry settlements connected with the industry. Of course, no other activity is undertaken in an area where a forest is planted, but in areas adjoining the forest, farming and grazing pursuits are carried on.
The people working in the forestry industry mix continually with the farming and grazing community and the citizens living in the nearby towns. Great interest exists in the growing of trees as such. Many farmers and graziers plant pinus insignis on their properties. Many plant these trees as wind breaks, but quite a number are encouraged to plant 8 acres, 10 acres or 12 acres - never more than 20 acres or 30 acres - as a crop. I should like to see some incentive given to encourage the planting of greater areas with trees than is the case at the present time. The average size of the farms in the Mount Gambier area could be from 300 acres to 400 acres. The district has a good rainfall area, and people engage in dairying, the raising of sheep and in some cases, the growing of potatoes. In other words, it is rich agricultural-grazing land. I believe that it is well within the capacity of the average farmer to grow up to 30 acres or 40 acres of radiata pine, if he is provided with certain incentives and if certain disincentives are removed. 1 come to the question of the taxation of income. Trees take 15 years before they become productive. I refer to the thinning process. Senator Cotton has pointed out that, with the removal of every other tree, a large sum is attributed to a farmer’s income at the end of 15 years, and consequently he pays a very considerable sum by way of income tax in that year. At the end of, shall we say, 35 years, the amount of income tax he would have to pay in respect of earnings from that area would be absolutely catastrophic. This is because the whole of his stand of trees is felled and sold in one year. Therefore, I submit that the Government should encourage at this point of time the planting and production of softwoods. The Government should do this if it wishes to strive for far greater production of softwoods because, as has been pointed out, by the year 2000, if we are not careful we will be importing £600 million or £700 million worth of softwoods. If the Government fears such a happening, it should encourage the planting and production of softwoods. One way of achieving this would be to devise an income tax scheme so that the farmer, in the year of thinning the trees and in the year of removing them, would not suiter the full impact of taxation on the income derived from the sale of the timber, as is the case at the present time.
I have had a look at the situation in relation to this matter in other parts of the world. It appears to me that in New Zealand a freedom from income tax on receipts from forestry projects conducted by private individuals applies. Even if the Government lost more revenue by introducing this scheme than it normally thought proper, if it were to follow or part follow the New Zealand practice the increased production on farms, and the ultimate retention in the country of money that at the present time is paid for imports of softwood, would more than balance the loss of income tax revenue.
I refer also to the question of estate duties. Here, I really think, great damage is done to the landholder who has planted softwood areas. The Commonwealth receives from £18 million to £20 million a year from death duties. The collection of death duties nas been a pursuit of the Commonwealth for 50 years. Estate duty is levied on the net value of the estate left by a deceased person. The value of the estate is arrived at by licensed land brokers and stock agents who are regarded as acceptable valuators. When such a person values a farming property, he values the land and the buildings thereon, and also the trees in any forest lots that there may be on the land. The value of the trees is assessed on the basis of the revenue that the trees are expected to yield in so many years time. An adjustment is made for the number of years between the date of the death of the landholder and the expected date on which the trees will be milled. Assume that the owner dies when the trees are 30 years old and it is expected that they will be milled after another 10 years. Within six months of the owner’s death there arrives an assessment based on the value of a forest that is three-quarters grown, and the executor of the deceased’s estate is called upon to .pay duty on threequarters of the value of the full-grown tree’s - a value which the estate will not be able to recover in monetary form in the normal way for another 10 years. It is an embarrassment to the estate to be called upon to pay the daly at that stage, when the trees will not be cut down for another 10 years.
– That is like classifying a tadpole as a frog.
– That may well be, but I do not understand the honorable senator’s reference. The point I am attempting to make is that estate duty should be treated here in the same way as in New Zealand, where a forest is not valued for probate purposes. If this were done, it would be quite an incentive to many farmers and graziers to maintain 30 or 40 acres of forest. lt seems quite wrong that an estate should have to find death duties in respect of a partly grown forest. The Government should pay great attention to this question. I believe that income tax and estate duty should be rationalised so that estate duty would not be claimed until trees were milled - in another 1-0 years, from the illustration I gave. That would enable the normal process of milling to take place and the money from the timber to be received before the duty was paid to the Government, instead of the duty being collected before the trees could be milled. I commend to the Government the system obtaining in the United Kingdom, under which duty is not collected until the trees are milled.
The growing of forests by individual farmers could be of tremendous value in the production of softwood. I believe that the Forestry Department in the various States would look upon this with favour. They have agricultural experts who would be able to advise farmers on the pruning, spraying and thinning of forests. I believe that a great deal of very good forest culture could be carried on by farmers and graziers in the more favoured areas of Australia, where pinus radiata can be grown to advantage. I support what Senator Bishop said about the South Australian Forestry Department. South Australia has a greater area of planted forests than has any other State, and this has been of great value in the production of timber for housing. I also compliment the Radiata Pine Association of Australia on the research work it is doing in connection with timber products. It is a great thing to carry out research into the uses of something we grow. To my knowledge, the Association, with its headquarters in Adelaide, has conducted very valuable research to ascertain the best paints to be used on radiata timber. I understand that this research is proceeding well and that those who use radiata timber are getting the best advice on the paint they should use.
I would like also to compliment the South Australian Government on the research it has had done in connection with the use of thin pieces of radiata pine for fencing posts. When bushfires sweep through a grazing property, both the fence posts and the fencing wire suffer and the cost of replacing the fences is great. It has been discovered that by treating small, smooth sections of radiata pine they can be made into excellent fence posts. This use can now be included among the other uses for radiata pine. Senator Bishop mentioned building materials, but radiata pine is now filling a great demand for fence posts on agricultural and grazing properties.
I think I have made out a case for the Government to consider with regard to income tax and estate duty, in order to give farmers and graziers in appropriate areas an incentive to have their own softwood lots. I thank the Minister for bringing the Paper to the Senate. I commend it to all honorable senators and I look forward to the introduction of legislation which will make moneys available to the State Governments for the purpose of planting radiata pine.
.- The debate that has taken place on the ministerial statement concerning the Government’s proposal to offer the States $20 million over the next five years, in the form of long term loans, to help lift the planting rate of softwoods, has been very enlightening to honorable senators. Many of us have realised the importance of forestry over the years, but perhaps have been satisfied to delegate the responsibility for forestry and reafforestation, and planning for the future, to the State Governments. The Minister for National Development (Mr. Fairbairn) was very quick to recognise and admit that this is no longer simply a problem for the States or for private foresters; it is a national responsibility. This was the most important part of the statement. It is now recognised that the nation must plan the future of its forests not only because of the large amount of money that we spend on importing timber but also because there may be times when we will be unable to rely on overseas sources for this important commodity.
The setting up of the Australian Forestry Council has produced rather dramatic results. On 7th April 1964, Senator Murphy asked the then Minister for National Development, inter alia -
Will the Government consider advancing moneys to the States to increase our forest areas?
The Minister replied - i would not wish at this juncture to express any views about Commonwealth policy as regards the financing of forest development.
Senator Murphy also asked the Minister ;
What progress has been made towards the establishment of a national forestry council? lt is pleasing to know that the Government set about the task of establishing the Australian Forestry Council, which held its inaugural meeting in August 1964. Since then recommendations have come from it and a thorough Survey of the whole forestry situation has been carried out. As I see the position, we must admit that Australia is perhaps the poorest of all continents as regards forests. 1 have had the experience of travelling through Europe by various means. Wherever one travels in Europe one can see the results of a long experience of forest planting. The forests are a feature of the countryside in many parts of Europe. The art of silviculture and the techniques employed are impressive. The results are a delight to see.
As I see the Australian situation, one of the great problems that the Australian Forestry Council faces is that our natural timber resources - the hardwoods that are endemic or native to this country - ‘take a long time to mature from the seedling stage. Therefore, investment in the planting of hardwoods may not be economic.
As has been pointed out by Senator Cotton in his informative speech - obviously he has a background of many years of study and experience of forestry - the cycle of softwoods covers a period of 40 years. I foresee that in a period of that length one of the great difficulties will bc the rate of interest. Here we come up against a problem that the trees themselves do not understand. The bookkeepers and accountants in the Department of the Treasury will insist that the results allow for the payment of interest over a period of years.
The history of forestry in Australia shows that each year the private farmer has invested a little of his savings in forestry in the hope that after a number of years his children or grandchildren will inherit his land and the trees on it. It has been an investment for the future. The land and the trees have not had to carry the added burden of interest. The planting of the trees has been paid for out of the savings of the farmer. Now we have reached the stage where it is imperative that some pattern be followed in order to achieve targets in the planting of softwoods. I compliment the Minister for National Development on bringing this matter before the public.
I should like to say a few words about our hardwood forests. The story is an unfortunate one. Over the years we have lost a tremendous amount of our natural forests through fires. The October 1965 issue of the “ Forest Resources Newsletter “ gives statistics of fire occurrence by forestry districts in New South Wales. Those statistics show that an estimated 1,302,000 acres of State forests were burnt out in 1951-52, compared with an estimated 200,000 acres in 1964-65. They also show that in the first nine months of 1964-65 an estimated 1,500.000 acres were burnt out by major bushfires. When we look at the total Australian picture, we see that there is much to be done in the conservation of our natural hardwood forests. The newsletter states -
Light aircraft are now fulfilling a significant role in Victorian forestry practice, and their use is effecting economies and has increased the efficiency of various operations.
Hired aircraft are used by field foresters in reconnaissance flights over inaccessible mountainous country … In their fire control activities, aircraft are used extensively for spotting, reconnoitring going fires, and dropping equipment and provisions to fire crews ….
In another facet of forest protection, aircraft are used to assist ground crews in locating sirex infested trees in plantations . . .
Direct seeding is widely practised in regenerating eucalypts after clear felling. The earlier technique of manual seeding has now been largely replaced by aerial seeding, reducing the cost of sowing from approximately SOs. to 7s. per acre.
The various States, within the limits of their financial resources, are doing their best to preserve their forest resources. Their finance is made available to them mainly from the Commonwealth Treasury either through States grants or loans. In my view, the amount that has been available to them has not been sufficient, as has been the case in so many other fields in which departments have been impoverished. Consequently, there has been a lack of proper fire watching and reporting of fires in the early stages when they can be brought under control much more quickly than after they really get out of control. There are many other matters that the State forestry departments could have examined and developed if they had been in possession of more money. This seems to be one of the problems that crops up in practically all activities. In the Minister’s statement the Commonwealth Government has acknowledged for the first time that forestry is a national problem. We are very pleased indeed to note that acknowledgement.
I believe that another point to which the Commonwealth Government should apply its technical men is assistance to the States to achieve the fullest possible use of timber felled. Particularly in privately owned forest areas where timber is easily accessible, those who wish to mill it take the logs and, in my view, leave considerable waste on the forest floor. The pulping industry is established in Tasmania together with the section of the milling activity which produces apple cases. In many areas, the best trees are chosen for ease of milling or felling and transport to the mills. I believe that a very close survey should be made of the parts of a tree and their best uses so that greater production could be obtained from a specific forest.
New areas are being opened up in Tasmania, mainly for pulpwood purposes, for the production of newsprint and paper pulp. It is the responsibility of the State Government to ensure that timber suitable for logs is kept for that purpose and used to its fullest extent. On many occasions, hardwoods can be substituted for softwoods, and vice versa. A survey should be conducted of the practices that have been followed over the years. People can enter forests and indiscriminately choose timber for their needs. There should be surveillance which will bring to the State and to the nation the greatest possible return from every tree that is milled.
The full picture of forestry has not yet been appreciated by the Australian people. In bringing forward this statement the Minister has perhaps created ari atmosphere which will stimulate greater interest in this very important economic problem. As Senator Cotton has said, forestry is a form of wood production, where the crop is harvested as is any other crop. The art of silviculture is of great benefit to this country. For instance, it encourages decentralisation because people can go out into the forest areas and earn a living. Small townships can grow up around a forest area. Forest products will make a great contribution towards reducing our very high import bill.
The plan to assist the States by financing the planting of softwoods is a good one. On the figures I have used, about £50 per acre will be available for the 75,000 acres that it is proposed to plant. Whether this amount will be sufficient to provide for clearing, planting and associated costs, I do not know. I hope that an incentive will be provided to the States to divert all the finance they can provide towards forestry, particularly for softwoods. I also hope that a stimulus will be given to our forestry industry and to the conservation of our natural forests. Every measure possible should be taken to improve areas that are being reafforested by natural regeneration, lt is to be hoped that, as a final result, the gross national product of the timber industry will so expand that we can bridge the gap at present existing between our consumption of timber and our local production of timber and forest products.
.- It is a pleasure to support the Minister’s statement that we are discussing. I imagine that in this sessional period if is the first measure on which both sides of this chamber are in agreement. The only slight disagreement we have had is the suggestion by Senator Kennelly’ that there is something peculiar about the Commonwealth Government’s providing something of a plan in relation to this softwoods planting project. Indeed, it would be peculiar if it could be undertaken otherwise than by a well laid out plan for the planting and growing of trees. This Government has great forward planning in many areas in which, over the last few weeks, the Opposition has been arguing vigorously that it should not have plans. At least that is true in relation to our defence.
The Minister’s statement concerns a matter of great national importance in which this Government has taken steps to provide for our future national welfare. My party takes particular pleasure in the realisation that something it has proposed for many years is now coming to fruition. The development of plans for planting and the establishment of the sawmilling industry, together with later developments of pulping and other activities that will be conducted in rural areas will provide a decentralisa tion measure of which my party has often spoken. It is a national contribution by this Government.
I am certainly delighted to be associated with the proposition that the Commonwealth is to provide assistance to the States for softwood planting.
– One can almost hear the music of the saws.
– That is right. I am pleased that the honorable senator hears that music, because the State from which he comes has a very important part to play in this respect.
– What about South Australian softwoods? South Australia has provided an object lesson for Victoria.
– That is quite right. South Australia certainly plays a big part at present in the growing of softwoods. The proposal is to provide for a lift in the planting rate of Government softwood plantations. I think we should be very careful vo note that there is a complete distinction in these two categories. In this instance the Government has thought it wise to provide finance, undoubtedly under the guidance of the Australian Forestry Council, which has been established for only about 16 months, in which time it has brought forward some rather wonderful recommendations. This Government has acted immediately to bring to fruition the suggestions that have been made.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 29 March 1966, viewed 22 October 2017, <http://historichansard.net/senate/1966/19660329_senate_25_s31/>.